Coupon/interest stops accruing when there is a non-payment [thus triggering a default on the debt]. So, if this is applicable in our CLNs, and noting the hefty rise in the coupon rate and cash payments, perhaps it was always Zaza’s+SN’s intention not to pay when they reached this ‘point in time’. May be that is another reason why Zaza wanted to have ‘that’ last investor meeting in October 2018?
May be the plan was always to put Hope under intense legal pressure that he would succumb to an acceptable financial settlement, especially as he only paid 25cents to the Dollar on these notes. But alas, they appeared to have underestimated Hope’s zeal, because he called their bluff and liquidated his collateral, namely shares in FRCC and personal guarantees…In my view, the initiation of liquidation proceedings and call up on collateral crystalized the debt at that point in time. Again, I am no corporate lawyer and haven’t seen the ‘fine print’.
Regardless of the legal ins-and-outs, we were kept in the dark with non-disclosure of material information relating to the CLNs.
Looking at the 30 June 2018 financial results, CLN stood around US$35Mln.
Also interesting, in the same accounts, this is what is says about the PSA: In June 1997, the Company entered into a 25-year production sharing agreement with the Ministry of Fuel and Energy of Georgia and State Company Georgian Oil (“Georgian Oil”), which gives the Company the exclusive right to explore, develop and produce crude oil and natural gas (“Petroleum”) in a 5500 square kilometer area in eastern Georgia known as Block 12, hereafter referred to as the “Block 12 PSA”. The Block 12 PSA can be extended if commercial production remains viable upon its expiration in June 2022.
It seems from the unpaid workers’ news article, where Zaza stated that PSA was to 2027 and “this was not enough time for investors to get their investment back”, meant that GoG probably agreed/approved a 5-year extension? Not sure.
Anyway, so much going on that it easy for one to get lost in the detail i.e. Cali case, Texas case, Arbitration.
Looking forward to seeing the news on the Texas hearing which took place last week. The update on that case could have far reaching impact.
As usual, JMO.