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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange) -- Ignore unavailable to you. Want to Upgrade?

To: Gemini who wrote (1660)	2/10/1998 9:50:00 AM
From: Duncan	Read Replies (1) \| Respond to of 2841

<<Giving the acquired company 30 million dollars in cash is like switching that sum from your right to your left pocket, isn't it?>> Allan: I'm not really sure I follow you. ECO doesn't have the $30 million in their pocket. They've had to borrow the $30 million from a third party--I-Bank, bond holder, crediit line, who knows...and are using the monies to buy DBCO. It will go on ECO's books as debt from X,Y or Z party. So it was never in their pocket to begin with. Have I understood you correctly? As for the Financial Post article--I'm truly shocked by many of the author's comments. Take what you read with a grain of salt...including all my assumptions and posts. Reported in the FP article: 1) ECO using "convertible debentures." My last conversation with Mike McGinnis led me to believe they would try every possible financing method before using convertible debentures again. And the DBCO / ECO press releases discuss this transaction as an "acquisition"...not a merger. Symantics for the most part...but acquisitions typically imply purchase price accounting--cash deals...and mergers usually imply stock swaps. All that said, we may see some convertible bond arrangement being used to acquire 51% ownership in DBCO...with the rest coming from straight debt. This may give ECO the option to treat the DBCO purchase as a reverse merger...and therefore bypass the Canadian exit tax penalty...and give ECO listing on the NYSE. It would also reduce their interest expense on the financing. Just speculation on my part...it's been quite a while since I was up on all the code. 2) I was also surprised to see a 90% shareholder requirement posted in the article. Usually the number is 66.67% in "change of control" situations. 90% simply doesn't seem realistic..and probably not achievable. 3) Did you ever wonder how the DBCO shareholder on the DBCO board had access to this article several hours before it hit the news sites? Just my two cents. Duncan