Originally posted by BigDaddy77
How about I flip the question and may I ask what makes you think they are are not going to get the finance?
Please keep in mind the following:
- KFW owned 80% Federal and 20% State of Germany
- Government owned bank, doesn't pay taxes
- Germany is AAA credit rating
- Over 90% of its borrowing mainly through bonds that are guaranteed by the federal government of Germany
- €473B Total assets..
"KfW is one of the largest and most active bond issuers in theworld... In 2017 a total of 145bonds in 10 currencies with a total volume of EUR 78.2 billionwere sold to institutional investors around the world. KfW is ina leading position on the international capital markets andenjoys a high standing... All refinancing instruments have one thing in common: theyare safe. This is because they are guaranteed explicitlyand directly by the Federal Republic of Germany. Due to itsexcellent creditworthiness, KfW has been awarded triple Aratings, the best possible credit rating, by the rating agenciesMoody’s, Scope Ratings and Standard & Poor’s. GlobalFinance Magazine has now declared KfW “The World’s SafestBank” for the ninth time in succession."
BigDaddy77, finance is not an issue in my view nor has it been so long as all permits and licences were granted. Even in the commodity trough of 2014/5 the DFS demonstrated that Mt Peake project was commercially viable (even if thry did overstate the titanium price at the time).
The issue for me n0w is, what will the final debt/equity ratio be. If there is an equity component will it be allocated to a single investor/cornerstone holder or will share holders be eligible to participate.
We have all seen the consequence of a 1/3 equity component at c 16 cents p/share. Its something like a dillution of c 200% to a total of 2.5 bill shares as 1.6 bill shares get added to the reqistar (pre Vinsom numbers).
Upping the S/P reduces the issue proportionately.
Reducing the equity component (assuming it takes the form of a share issue) is probably the single biggest factor effecting existing shareholder value than anything else.
Imagine a market accepted NPV of even a conservative $3 bill on a 100% debt funded project. The Pukeko would leap upn n down so hard he'd morf into Roger the Alice Springs Kangaroo, buy the local pub, higher Kath n Kim to run it and retire everything exept his right elbow.
Good to see some volume on increased SP yesterday. That must be the first time weve seen that combination in ages. Apparently TNG has entered "weak buy" territory too. Best christmas present any holder could hope for after the last eight months of market ridicule.
