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Frontera cant repay death spiral debt so extends it - at a cost and it still has no cash

By Tom Winnifrith, The Sheriff of AIM | Thursday 7 June 2018


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


I wonder how the whore blogger, Fat Bastard himself, Mr Malcolm Graham Wood will explain this away as good news. After all that is what Frontera (FRR) pay him for. In essence Frontera has no cash, is burning cash and had to repay $2.891 million to death spiral provider Yorkville on 16 June. Problemo! 

But here is a solution. First of all Frontera hands out more confetti, another 10 million shares to Yorkville to flog making it a quick 40 grand.  Then Yorkville has agreed to extend the loan allowing Frontera to repay at $265,000 a month for a year which - as you have already worked out is $3.18 million. So the total cost to Frontera of delaying repayment by an average of six months is c$300,000 or an annualised rate of interest of well over 20%. Yum Yum.

But hang on! How can Frontera repay even that when it has no cash at all? Easy it can repay in shares. Er, okay. On what conversion terms. Er... the release does not tell us that. Good spinning by prize PR dickhead Tim Thompson of Yellow Jersey, the man fired by Buchannan for engaging in dirty tricks against shareholders in Range Resources on behalf of his client, as we exposed HERE. 

Of course the terms will be based on a discount to VWAP and so will be favourable to Yorkville but does not Nomad Liam Murray of Cairn think that in the interests of transparency the terms should be disclosed. Liam I know they will be crap and dilutive and screw the share price but you can always get the whore blogger to write "independent research" not declaring he is on the payroll saying what a great deal this is and the morons who own Frontera will lap it up.

So we can now expect a rolling death spiral and that is just to repay old loans. Meanwhile the company has no cash so needs to do a placing asap to add to the 
15,770,835,403 Ordinary Shares now in issue. At 0.4p-0.44p the market cap is a stonking £66.2 million. For a company facing a death spiral stock dump, needing a bailout refinancing ASAP which cannot bare to admit the full ghastly details of today's latest bad news, which has shit management and even shittier assets that is ludicrous. SELL


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