Its almost impossible to see MHLO in the money IMO. Even with...

Its almost impossible to see MHLO in the money IMO. Even with 100% debt. You have until Aug 2011 to see MHL at 2.5c or equivalent if consolidated.

You would require MHL market cap of 2.5c x 4bil which is $100mil. The company would have $90mil debt. So you need market cap $100mil + $90mil which is $190mil

At 10xPE, that requires $19mil earning by August. Trinidad only produces 700bopd. Wont happen in time.

Plus you couldnt secure $90mil against Trinidad because as it stands it is worth less. We a paying a small premium knowing that we can get more out of it.

And nodody lend against 100% valuations because of GFC and writedowns.

Also we couldnt service $90mil debt. Interest would kill us.

And no sane investor would agree to a con note that converts in the future at such a bad conversion.

If they want equity now, they can get it at 0.4c, you are wanting them to agree to convert in the future, sometime after Aug2011 when the shares are above 2.5c?

Ofcourse some debt will be used. And if its 50% you may have an outside chance.

But I'd be happy looking for compensation in form of rights issue IMO.