re: how are notes going to be funded? 30/12 I posted the...

re: how are notes going to be funded? 30/12 I posted the following among other comments
Post #845516
"The conv notes are NOT a problem in my opinion. The stir about them suited the "agenda" of the previous Chairman.

The $30m CNs is only 'debt' because share price is below 60c, otherwise noteholders would have converted to shares.

Now they are 'debt' that needs dealing with before April 06 as share price is currently below 60c.

A few ideas on what I think can be done. If you simply regard them as a 'debt'
- you can pay them off with more borrowing (cost you $2.7m pa interest @ say 9%pa) and defer debt until cash builds. No problem with current cash flow which could be as high as $15m per annum by June 06.
- you can raise capital now by a rights issue and extinguish the debt all together.
- pay part from existing cash of $27m (as at 30/11/05)
- issue another series of conv notes at say 10% for 3 years and use the $50m from AGL when paid, to pay out - if share price then is not above new CN issue price.
- make an offer to existing CN holders to swap say 1 CN for 2.5 shares at current share price (Sherlock Bay Nickel recently did this very successfully). Debt gone/effectively a capital raising which dilutes us shareholders.
- Or, a combination of any of the above.

Remember had the share price been above $0.60, conversion of notes would have been dilutionary anyway - effectively they were/are a rights issue with bonus interest - very smart in my opinion.

I think once you put these CN in perspective and look at asset value/reserves/gas sales/cash flow, SGL has huge potential. Companies carrying debt is not a huge issue unless the interest cannot be serviced."

You should review the whole thread - cheers