Lenders of the $30m revolving credit facility: "According to the terms of the contract we signed in early 2013, you are now in non-compliance. Do you agree?
Management of Luna Gold: "Yes, we agree."
Lenders: "We therefore have the right to fuck you up the ass at this point, if we so desire. Agreed?"
Luna: "Yes, that's true."
Lenders: "Therefore we come to the central question: Would you like to be fucked up the ass today?"
Luna: "No, we would not like to be fucked up the ass today."
Lenders: "Are you sure?"
Luna: "Yes, quite sure."
Lenders: "Indeed, we thought as much. In that case, pay us $100,000 and we won't fuck you up the ass today."
Luna: "OK, we'll do that."
Lenders: "And the cash you have in escrow for the contract hedging program, give us that now."
Luna: "That's $6m dollars!"
Lenders: "It is. But we're not asking for that for free like the $100,000 legalized extortion you've already agreed upon, you can count that against the money you owe us."
Luna: "Oh, OK. In that case yes we agree."
Lenders: "However, this won't stop us from fucking you up the ass at any point in the future if we feel like it, our agreement today is to stop us fucking you up the ass right now. We hope that's clear."
Luna: "Yes, that's clear."
Lenders: "Right, all settled then. Have a nice day."
Luna: "Thank you, have a nice day you too."
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Good morning ladies and gentlemen readers and visitors of IKN, we hope this Friday is treating you well and this post finds you in good spirits. After receiving a couple of mails already on last night's news release from Luna Gold (LGC.to) with general inquiries to its consequences, IKN has decided to run a short explainer on the subject.
Imagine, if you would, a conversation between Luna Gold management and the group of financiers that lent them money:
We hope this sheds light on the issue. Please have a nice day.