I read a bit more about it. Please DYOR and due diligence. I was actually reluctant to post this as it’s intriguing. 
This my own analysis SXX. Disclaimer: This is not investment advice and I could be wrong in my analysis / assumptions.
Fundraising is as follows.
- $500M Senior Secured notes.
- $400M convertible bonds paying 5% per annum with an initial conversion 24 cents (USD) which is a 30% premium from the current market price.
- $425M equity placement at 15p
Second bullet point. This type of financing is known as toxic / death spiral financing. It’s a license to print shares.
They stated the "initial conversion price" of 24 US cents on top of the 5% annual coupon rate. How lucky are the 1% who are into these kinds of deals? Let’s call them “financiers”.
This meant that in the bond agreement, the financiers will be provided a floor level. This info is usually not available to small shareholders. Every time the share price drops, their conversion price will be adjusted accordingly so that their conversion price is greater or equal to the market value of the shares. They can’t lose basically unless the company goes bankrupt.
When they exercise their right to convert, the company would have to issue more common shares. They flood the market with fresh new shares. As a result, the share price is depressed for a while. They time it too. Usually, an RNS or a piece of positive news is released to make the share price jump. That’s when they usually start converting and sell at market to unsuspecting traders/investors. This can be seen from the chart over the past 10 years that’s looking like a mean-reverting pattern. The optimal sell area is in the range 30-45p.
This is a speculative lottery play. Yes, it can go 30-40% one day. When that happens, keep in mind the “financiers” converting their bonds and selling shares.
It looks like they’ve been doing this for a while now. Look at the number of shares in 2009 vs the number of shares today. It’s kind like the central bank printing currency to devalue it. In this case, we call it dilution.
JPM provided a $2.5B revolving credit facility. This is like a credit card on top of those bonds (debt) that they can use to develop them mines.