Precious and Base Metal Investing Message Board

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Gold/Mining/Energy : Precious and Base Metal Investing

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To: russwinter who wrote (957)	12/18/2001 8:13:33 PM
From: baystock	Read Replies (1) of 39344

I am not sure why you find this deal so objectionable, since I find it quite fair. There are 3 main components: -GEO currently has 75 million shares outstanding and 40 million new shares will be issued for the private placement, which is only around 35% dilution. I see this as positive -Payments on the debt to their banker RCF has been deferred for 9 more months. But there will be a surcharge of 40% annual interest on this debt starting in 9 months. Yes 40% rate of interest is high, but I think it is reasonable considering the risks. So this also appears to be positive. -10% net royalty from Vueltas cash flow. This doesn't seem exorbitant either. Overall this restructuring is much better than going into liquidation and better than the deal TVX shareholders got, when they ended up with only 10% of the company. I thing GEO shareholders will end up with over 1/2 the company if Vueltas is turned around in the next 6 months.

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