Originally Posted by
Enumerate
The Torchlight investment of up to a $100m line of credit is actually quite simple. It is simply a secured line of credit.
It is not equity. There was the talk of issuing convertible notes - this never happened due to the fact that a complex equity/debt deal did not attract the support of Treasury.
Torchlight have never been lined up to recapitalise SCF. The introduction of the equity assets (Scales and Helicopters) was the equity injection. As far as I can understand, Torchlight have been in line to take out some of the "bad bank" assets. It looks like managing the "bad bank" recoveries is being done, inhouse to SCF, with Torchlight finance as a kind of "bridging loan".
I see a change of plan - but I cannot see any deception.
I can't imagine that even David Hillary couild criticise - after all the United States Private Placement facility that was repaid, early, in February, was a similar senior loan to the Torchlight loan. Clearly the debenture Trustee is happy with this deal - I believe the covenants allow the company to take a senior loan of this magnitude.
Next example, please.