Hi Shreik,Before you completely denounce the analysts, may I...

Hi Shreik,

Before you completely denounce the analysts, may I suggest that you take a closer look at the Glencore offer.

There are a number of conditions to which the Glencore backed re-capitalisation is subject, including:
1.
HWE arranging KPC financing for a minimum of US$75M;
2.
A$70M of new bonding lines;
3.
A$30M revolving credit facility;
4.
no events of default or acceleration events under any existing credit or financing arrangements;
5.
FIRB approval;
6.
shareholder approval;
7.
no new credit or financing facilities entered into other than those mentioned in 1-3;
8.
waiver of change of control conditions that otherwise permit termination /acceleration in existing customer contracts /financing contracts (ie: in event of Glencore moving to a position of control upon conversion of the convertible preference shares);
9.
satisfactory renegotiation of the Ashton Coal Mine Contract;
10.
no material adverse change in financial position or prospects of HWE, or its businesses or assets and no material proceedings (litigation) or regulatory investigations.

There are other conditions, apart from those outlined, above.

For its part, Glencore collects a A$2.25M commitment fee, a A$1.75M underwritifng fee, (if it were to eventuate) a A$2.75M break free, and reimbursement of legal, advisory and consulting fees /out of pocket expenses.

Preferential dividends to be paid at 6.5% per annum in cash (3.25% half yearly). If not payable in cash, then payable in additional convertible preference shares at an effective dividend rate of 8.5%.

Glencore is certainly in effective control here.