Iofina Share Discussion Threads

[madchick] 07/5/2014 10:49

For clarity (since my last post was a bit ambiguous, partly due to my own struggles in understanding! I wrote it mostly so that I could work it out for myself!), I think Panacea don't really buy the shares, they are given the shares by IOF at a pre-agreed face-price of 40p as repayment of the debt. Panacea wins because they can immediately sell all for 100% profit rather than just getting the interest rate on the loan if IOF were to pay back in cash. As che says, IOF can also just pay the debt off if IOF had enough floating about.

I agree with che's 100% upside, without water! :-)

[che7win] 07/5/2014 10:04

Dig,
As I say, we have three long years ahead to build cash, at that stage we have a third option to borrow using a conventional loan and just hand that money over to the convertible loan holder.

In reality, the loans will most likely convert to shares, no big deal, hopefully in three years we will be able to pay dividends or buy back shares.

Reality setting in here, sellers drying up as this is as bad as it gets.
Good news from here on and this is bargain territory, some obviously hoping to get in cheaper today.

I expect at this level 100% upside within a year.

[diggulden] 07/5/2014 09:56

Netters, Che, and madchick, thank you for the explanation.

So basically, it will result in dilution, at some point, unless the bonds can be repaid in full, which at the moment looks a long way off.

Important to understand these things.

I guess the concern would be if the price stays low and we re-negotiate with Stena again, we would be forced to give a higher dilution again.

Good to see the share price gaining today.

[n3tleylucas] 07/5/2014 09:23

Festario,

I have to be quite emotionally detached from the real-life gains/losses and their effects on human beings, or I wouldn't be able to post anything without being compromised.

It was important for someone to try to put the arrival of mister big, the departure of Chris and these bonds into some kind of meaningful context.

I hope some of you have found my input of use, if not... hey.

[rhwillcol] 07/5/2014 09:22

Not a lot of stock around by the looks of it. Could sell at premium to the bid price before the recent buys.

[madchick] 07/5/2014 09:20

"The Company has the right to elect conversion of the Bond if the share price trades at 80 pence per Ordinary Share (being a one hundred per cent. premium above the conversion price) for five consecutive trading days."

I understand this to mean that if IOF has a share price of 80p for five consecutive trading days, IOF can demand that Panacea convert the bond. I understand "converting the bond" to mean that Panacea buys those 80p shares for half-price, the extra shares come onto the market, and the loan is thereby settled. But I could be wrong!

I'm not sure whether the market would take such an action as a good thing (debt repaid) or a bad thing (dilution) or whether it would just dither about and remain the same!

[festario] 07/5/2014 09:11

Hmmm, Netters, you are wrong about one thing at least.You say Festario knows (or knew?) what is happening here.Sadly Festario doesn't know anything. If he did he wouldn't be sat on 130,000 shares worth very little.I simply live in hope, and let the company get on with their jobs. Not selling, so what's the point fretting?Now, I concentrate on the shares in my portfolio that make up the higher value. (IOF were the highest at one time).

[n3tleylucas] 07/5/2014 08:59

Hey diggers,

Yeah, but Arron's convert @40p, the 80p is forced conversion by the company.

The key here was Chris's conversion drop from £2 to £1. You can see what's coming next?

Then add in all their share holdings! ffs these guys have this sewn up. On the cheap?

[alphacharlie] 07/5/2014 08:58

Anyone else help with the/a private group? N3 doesn't have the time and Sg1 wishes for one. Don't understand about yachts and dingys and estate agents though?

Up to you really N3 since you raised the matter

[1madmarky] 07/5/2014 08:55

RE : humpty dumpty - not surprised by that at all. Building plants without checking that there would be brine going to the plants.... Muppet!

[che7win] 07/5/2014 08:54

Dig,
In either case, the lender would only convert above the conversion price.

So Panacea would only make sense to convert at above 40p, but they can't elect to convert until the share price rises to 80p.

If the share price stays low, the company could also repay the loan e.g. by a conventional loan, as long as they are in a positiion to do so e.g. If the share price was at 90p, we could just repay the Stena loan by borrowing from another lender. There are options and we have the breathing space now to grow over the next three years.

In reality, both loans will most probably be converted to shares.

[diggulden] 07/5/2014 08:41

Anyone feel free to educate me on the above, not just Netters.

[diggulden] 07/5/2014 08:40

Netley, just educate me for a second as I'm looking at the bonds that you are talking about. Bonds confuse me, fund raising via dilution is easy.

In May 2013 when the $15Mill bond was issued, it had 6.5% annual interest to be paid and a conversion price of £2.06. 4.6 million shares to be issued or 3.67% of the company.

In March 2014 the bond was amended, it was extended by 2 years and had 6% annual interest, but the conversion price was dropped to £1.00, 8.9 million shares or 7% of the company.

In April 2014 another bond was issued for $5 million. Interest at 6% paid quarterly and was only issued at a 5.6% premium to the share price (whereas both of the above were at a double figures premium). Conversion price of 80p. 7.4 million shares to be issued or 5.84% of the company.

So, what are the ramifications for the company if the share price stays low?

I assume Panacea simply convert and grab 5.8% of the company? Stena however would likely re-negotiate again, extend the bond, lower the conversion price and end up with doubling the percentage again to around 14%.

Does that sounds right? So potentially if the share price stays at this level, Iof could be giving up 20% of the business across the two bonds? If the share price rises and they don't need to re-negotiate with Stena, it will be 12.8% of the company.


Does I have that right or I am I misunderstanding it?

How do they avoid the above?

[1madmarky] 07/5/2014 08:35

Yeah, the bears are getting nervous IMHO. April numbers were a little low but with IO2 offline for almost half of the month possibly not that bad. So what will May deliver? A full month of IO1, 2&4 should see us at the 400tpa rate with 3 more plants in hand once the brine is back online. Should be fun to watch!

[che7win] 07/5/2014 08:33

What that avatar posts, whether here, on XEL, or elsewhere is not factually correct, misleading and disingenuous in a lot of cases.

I just wanted to point that out. Interesting how wrong it was yesterday on XEL, says it all.

IOF lost its way with poor management recently, Lance has already cleared a lot of the mess up, I've no doubt we will be considerably higher in the next 12 months, my fear is we get taken out too cheaply.

Back to lurking.

[n3tleylucas] 07/5/2014 08:31

Exactly, ttfn.

[microcline] 07/5/2014 08:29

N3 surely you have work to do over at Xcite energy? its up again this morning.

[n3tleylucas] 07/5/2014 08:29

I'm a bit busy atm, but ask around.

[alphacharlie] 07/5/2014 08:26

N3tleyLucas 7 May'14 - 05:00 - 20792 of 20803 4 5

Is Arron in the private group yet superego?


What's that all about then? What's the private group?

[n3tleylucas] 07/5/2014 08:24

I guess you're right cyberbub;

cyberbub - 22 Apr 2014 - 16:40:24 - 19408 of 20804
Poor results released this week might see a short-term drop to the previous support of 50p IMO... but as long as the production forecast is good then I would hope to see us start to recover northwards pretty quickly.

GLA NAI

[orslega] 07/5/2014 08:21

ah see what you mean Che - 3 filtered posts from him 0237, 0439, 0500...he's either having a bad dream or being paid good money to post at those times. He needs to see someone...

[rogerbridge] 07/5/2014 08:16

We all are che, everything in place, just a matter of Lance and the team delivering and they will. IOF looking good.

[cyberbub] 07/5/2014 08:14

I have no idea what netters is saying, but someone who stays up all night posting incessant negativity has to be a couple of sandwiches short of a picnic IMO. I recommend the filter button.