reely - The bondholders do not get "cashed out" if the separation plant has not produced 500 tonnes of REO by Sept 2014.  The conversion price for the bonds is reset to a different number.  The entire bond covenant is on Sedar.  Go there.  Get it.  Read it.  I have. 

There is much more in the covenant and it covers many different possiblities relating to dilution and change of control.  This document is important to shareholders even if you do not own the bonds (and I do not currently).


From page 85.

7.13 Conversion Price Reset

The Issuer shall by 11:00 am London time on the date falling 30 months after the Closing Date (the “Reset Date”) provide a written certification (in form reasonably acceptable to the Trustee) stating that either:

  1. (i)  the Separation Plant is operational, has been commissioned and, over any 90 day period expiring prior to the Reset Date, has produced not less than 500 metric tonnes of REOs; or

  2. (ii)  the Separation Plant has not satisfied the requirements set out in paragraph (i) above (“Non Compliant”),

such certification from the Issuer being the “Operational Certificate”.

If the Operational Certificate provides that the Separation Plant is Non Compliant, then the Conversion Price in force immediately prior to such Operational Certificate being delivered to the Trustee shall be adjusted to the higher of:

  1. (i)  the 20 day Volume Weighted Average Price of a Common Share preceding the Reset Date; and

  2. (ii)  83.34 per cent. of the Conversion Price on the Closing Date,

such adjusted Conversion Price shall never be greater than the Conversion Price in force immediately prior to such Operational Certificate being delivered to the Trustee.

The Reset Conversion Price shall be the Conversion Price with effect from the Reset Date.

Any such adjustments shall become effective as of the Reset Date and shall be notified to the Bondholders in accordance with Condition 18 (with a copy to the Trustee) as soon as practicable thereafter. Neither the Trustee, the Paying, Transfer, Calculation and Conversion Agents nor the Registrar shall be responsible for monitoring whether any adjustment of the Conversion Price may be applied in accordance with this Condition 7.13, and shall not be liable for (i) any failure to so monitor, or (ii) any adjustment or non-adjustment of the Conversion Price. The Trustee shall not be responsible for investigating the contents or accuracy of the certificate to be delivered by the Issuer pursuant to this Condition 7.13 and shall incur no liability to the Bondholders or any other person for any errors or omissions in such certificate which shall be the sole responsibility of the Issuer.



wwwater: tell me, why do you think the bondholders insisted on putting the covenant into their agreement that they get to be cashed out if the SX facility is not up and running by September 2014? As your grand plan makes clear, it is certainly not for lack of funds to build the SX facility. Then if it is not money to build the facility, what possibly could the bondholders be thinking of? They had to be thinking of some potential problem. What could that be, wwwater?