Australia's largest stock trading and investment forum Australia's #1 stock forum

IHS

Click for more information

10.0%

4.4¢ interpose holdings limited

Another factor is that Vandasia will be at 33% if all options...

First 3 Last

Share
Profile

Follow
CaptainBarnacles

7,719 Posts.

161

10/09/14

10:41

Post #: 13951611
Share
Originally posted by hero of xerox ↑

I’ve been having a look at the SNY financing deal announced today…and wanted to provide some thoughts on the deal. But please…DYOR.

As a long term holder I’m very happy (actually bloody stoked) with this development which fundamentally changes SNY’s position.

The company has arranged $25 million in funding from a single entity (Vandasia) that will take a 43.9% stake in the company over two transactions.   

The averageprice of the funding comes in at 34c p/s, a 79% premium over the last traded price. Unheard of in todays market!!

This is in part being done through the purchase and exercise of 47.75 Million existing options, removing just under half of all options issued in the company – this both effectively reduces any future options overhang and reduces the total dilution to existing shareholders from the current raise, with 116.3Mil shares/100.5Mil options before the raise and 207.4Mil shares/52.7Mil options post financing.   

Two factors are important for Sunbird- the quality (and cash balance) of the investor, and the motivation for investing. Vandasia is an investment company with a specific interest in gas assets, LNG solutions, and gas-to-power projects, fronted by management with experience in delivering major industrial projects.

Vandasia’s motivations are a bit more obvious and appear to be two-fold- they intend to share responsibilities in the exploration and development of Ibhubesi (including infrastructure supply which is a complimentary money spinner), and there’s also scope to provide additional gas supply options in addition to or EARLIER than Ibhubesi can deliver first gas.

With these sort of terms there would appear to be a strong likelihood that Vandasia already has complimentary assets that could be bolted on to Sunbird and benefit from an overarching gas sales agreement with Eskom- which I believe is still in progress but is part of the conditions for the second tranche of the raise, so Vandasia must feel a conclusion is close by.

Before this financing the company had been priced as a cash poor developer likely to undertake a discounted capital raise- IMO the share value should continue to react positively to reflect this sudden change in circumstance (particularly once the first tranche is completed), along with the raising being done at a very strong premium and the removal of half of the options overhang.

In any case…further upside will be dependent on the market interpretation of the deal structure or further news catalysts.  

There’s a fairly wide range of potential catalysts, which could include: 

Completion of the first and second tranches of financing. 

Signing of a Gas Sales Term Sheet with Eskom. 

Potential for early gas supply- given Vandasia’s investment interests LNG would seem to be their first port of call.

This would work with the theory that Vandasia is also investing in Sunbird as part of a market entry/asset bolt on play into South Africa. 

Much faster progress at Ibhubesi with greater pulling power to secure a major JV partner.

Its hard not to like the deal announced today...as a result SNY is poised to become a serious player in South Africa's domestic energy supply market. SNY is a vastly different proposition today than it was yesterday.

Expand

Another factor is that Vandasia will be at 33% if all options and perf rights were to be exercised/allocated. As a shareholder obviously I would love that - as some are at 50c - lol
IHS Price at posting: 25.0¢ Sentiment: Buy Disclosure: Held
Upvote

0 Great analysis

Reply

Top Stories

CMB

Asian Battery Metals uncover second massive sulphide discovery at Mongolia's Oval play

CAF

IP anomaly thrills Cannidah with project extension hopes in QLD

PCL

HotCopper users react as Pancontinental Energy's trading halt lift reveals little

GRL

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

C1X

iTech inks deal with Chilean lithium giant to progress Reynolds Range

MIN

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

ALY

Alcidion inks deal with Vic health provider Peninsula for use of Miya Precision tech

ASX Market Open: Aussie market to leap on best 'Trump trade' bump since election day | November 22, 2024

WC8

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

BTH

Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

There are more pages in this discussion • 2 more messages in this thread...

First 3 Last

Add IHS (ASX) to my watchlist