Iofina Share Discussion Threads

[orslega] 29/4/2014 07:07

LB quickly in the driving seat...

RNS Number : 7130F

Iofina PLC

29 April 2014

29 April 2014

Iofina plc

("Iofina" or the "Company")

(LSE AIM: IOF)

Successful Completion of US$5m Unsecured Convertible Bond

Iofina, specialists in the exploration and production of iodine and iodine specialty chemical derivatives,is pleased to announce that it has completed a US$5 million unsecured convertible bond to be issued to Panacea Limited (the "Bond"). The Company intends to use the net proceeds of the Bond to strengthen the Company's cash position, which stood at US$2.3 million at the end of March, as it looks at expanding its production base.

The Bond will be issued at par by the Company and will have an annual coupon of 6% payable quarterly in arrears. The Bond is convertible into fully paid ordinary shares of the Company ("Ordinary Shares") at a conversion price equivalent to 40 pence per Ordinary Share, which is approximately a 5.6% premium to the closing price of 37.75p on 28 April 2014. 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.

Based on the issue size of US$5 million, the Ordinary Shares to be issued upon conversion of the Bond would represent 7,434,944 Ordinary Shares or 5.84% of the current total number of issued and outstanding Ordinary Shares of the Company, which stands at 127,284,398 shares.

The Company has the right to redeem the Bond without penalty at any time at which point the holders may elect to convert or receive repayment. If not converted or previously redeemed, the Bond will be redeemed at par at maturity, being 15 May 2017. The Bond also includes early redemption and /or exercise in the event that the Company is taken over by a third party.

No origination fees or placing fees were paid on this transaction.

Commenting on today's announcement, Lance Baller, Non-executive Chairman and Co-founder stated:

"We are pleased to have completed this convertible bond issue with Panacea. While this financing is not needed to sustain the current operations of the business, it allows us to look at further expansion through the construction of mobile units or plants similar to IO#2, both of which would be expected to be accretive to earnings."

For further information, please contact:

Jeff Ploen, Interim CEO and President

Iofina

Tel: [phone]

[crosseyed] 28/4/2014 22:20

che7win,

Pax. I support your view of the future :o}

c

[che7win] 28/4/2014 22:03

Crosseyed,
Fair enough, I won't argue with you, we'll see in due time the consistent brine flow.

Just remember that 12-18 months from now, the fracking disruption will be a thing of the past for these new plants, brine flow will be in excess.

Let's see a back up plan for brine supply for these new plants in place for now.

I think things aren't as bad as forecast, 400 MT is an easy target to exceed but I won't argue the case.

[bogg1e] 28/4/2014 21:07

Netters, you asked about future revenues. Im not sure im brave enough to calculate for 2016, and im still working on the numbers, so i am bound to change my mind, but here goes 2014 $3mil profit, 2015 (no water and only IO1-6) $10 mil profit.

[festario] 28/4/2014 20:19

In my time managing Imports and Exports of goods there were, and still are, a plethora of payment methods.
The riskier the payment terms, the closer to 100% of it you get. The safer the method, the more you end up giving to a broker or bank.

If IOF have been exporting Iodine (to say, India), and they have been in need of quick cash, then I would expect that they have been paid PRIOR to shipment, on a FOB basis. IOF's bank will have facilitated this, and charged between 1% and 3% for the surety.

If we are talking domestic sales, then the terms outlined in the previous posts will be about right. i.e. 30 or 60 days, or EOM following.

But, I am unsure how much (if any) we have actually sold externally, and I wonder if it has not all been utilized by the chemical division?

[crosseyed] 28/4/2014 20:07

che7win,

I'm very much a supporter of the IOF "dream" but let's not overstate what has been claimed.

If IO#2 had been producing 1 mT/day a year ago, April would have seen 25-30 mT produced just from IO#2 alone plus perhaps a further 3 mT from IO#1 (they were still experiencing very low ppm brine at that time). Total production from Q2 2013 was 45 mT. Hardly seems likely.

Whilst IO#2 may have produced more than 1 mT on the odd day, it most certainly does not represent anything close to its average daily production.

The problem has been that we have been fed fragments of information which in restropect seem to have been designed to give a false impression of actual performance. Technically, I'm sure that IOF does have a sound, and very profitable, business model. I'm sure also that they will sort out the problems and start producing much closer to capacity with less down-time. But let's remove the rose-coloured spectacles and examine the facts (as opposed to dodgy RNS statements). It has for some time been a reason for concern that IOF has been so secretive about disclosing what most would regard as required data, in particular production levels. RNSs have become increasingly misleading.

You generously and frequently provide estimates about the company. Indeed you were pretty well spot-on with your estimate of 50 mT for Q1 2014, much lower than I had forecast. But you were not basing that on the basis of expected output per plant (3 of them) even adjusting for weather reductions.

As I said earlier, if IO#2 and subsequent plants can produce steadily at 1 mT/day, that would indeed restore IOF to a very profitable business. And for what it is worth, I believe that is likely.

c

[serratia] 28/4/2014 20:00

Receivables at year end were $2.6m, that's 50 days. Terms will vary with the customer and whether home or export. For home I would look for 30 days EOM (End of month) and ship near month end. Buyers on the ball would place an order for the start of the month so they'd get 60 days. In this case I would ship just before month end anyhow unless they got ratty.
Export orders were often 60 days EOM to allow for shipping times. 50 days seem a little high overall, I'd target 40-45 days max overall so not far out.

[n3tleylucas] 28/4/2014 19:56

Hmmm...

This was a laugh graham



Oh well LOL

[che7win] 28/4/2014 19:31

Cross eyed,
I believe recently, the company was producing over 1mt a day.

This time last year, io2 was producing 1mt a day.

Last week, it was said:
"Plants IO#1 and IO#2 remain profitable are unaffected by fracking schedules and continue to produce iodine as planned. " and "recent production from IO#1 and IO#2 has returned to expected levels".

Also "The Board expects significant improvements to the operation, design, and construction of WET® IOsorb™ plants in the year 2014, positioning the Group for record production and improving financial results."

I've been saying for a while, there are improvements to be made to current operations.

Superg has mentioned filters being corrected on io2 and it was said io2 was down half of November due to unplanned downtime.

The fracking disruption minimised to io2 will help improvements this year:
"Received significant increase in iodine-rich brine volume at the Company's IO#2 plant as a result of the completion of the Operator's fracking program;"

Just as an aside, io1 is a tiddler and the oldest plant but it is still seeing improvements in operations:
"Iofina continues to cooperate with the Oil and Gas Operators ("Operators") to maximize brine supply to each plant. Such efforts have led to an increase in brine volume at IO#1 and resulted in significant improvement in iodine production at the plant."

[neddo] 28/4/2014 18:09

net, you are getting boring now,

[crosseyed] 28/4/2014 18:04

che7win,

Given the volume produced in H2 2013 (180 days) was 108.5 mT from IO#1, IO#2 and a little from IO#3, IO#2 has not produced at anything close to 1 mT/day, perhaps maxed at 670 kg/day.

The RNS of 17/12/2013 claimed that a daily average for all three had achieved 1 mT/day, though for how many days? As that was written by George Lantz, I wonder how much credence one can give to that.

A few plants doing 1 mT/day or more for most of the time would be very nice :}

c

[n3tleylucas] 28/4/2014 17:45

Now look at my question.

[che7win] 28/4/2014 17:42

Bob / superg,
Good info from the both of you, much appreciated.

I was told that IO2 was capable of between 1.4 to 1.8 mt not long ago, we shall see.

Basically, the 400 MT discounts plants 3-6 running most if the time, yet I think in last weeks announcements somewhere it was indicated that these plants would run profitably.

[beeezzz] 28/4/2014 17:35

Bogg....I bet that made her day, Hmm, It would be nice if accounts were simplified so the mentally challenged could understand them.

[orslega] 28/4/2014 16:46

it would not surprise me to see him pop again, but not here - this time providing Iofina with a convertible loan along Stena lines, but easier terms - he was very keen to maximise production opportunities....a short term soft loan will facilitate a few mobiles in strategic positions....LB probably has the plan sorted..

[superg1] 28/4/2014 16:41

Plenty of rumours re that Bob, confirming our first thought post his absence, which was speculation at the time, as he is definitely not the shy type.

[bobsworth] 28/4/2014 16:17

RM
I would love to know why Mr Big has disappeared.
Maybe his hints were too near the truth and he has been legally silenced!

[tipjunkie] 28/4/2014 16:15

Netleylucas

aka Onslow!!!!

pmsl

[n3tleylucas] 28/4/2014 16:13

'Well Mr B knows his onions'

Hey Melly, he's smelly.



God.

[dcgray21] 28/4/2014 16:09

Lol Bobsworth - truly Machiavellian

[bobsworth] 28/4/2014 15:58

dcgray I believe that is Lance's game plan from now on i.e. to under promise and over deliver to ensure the target is smashed.

With the board now focused on addressing the brine supply problem, fingers crossed this target will be met much sooner than year end.

Also doing a "low ball kitchen sinker" bowled George out with a call to resign!!!