AVZ Discussion 2022

[Carlos Danger]

What are you basing the ‘3 months’ on?

Clearly not the ICSID procedural rules, 9card’s timeframes or Nigel’s comment at the AGM that it will last until late 2026 or early 2027

You smashed me in likes tho lmao

3 months deliberation
then court hands down findings
then awards (think of this as sentencing)
then appeals process (inevitable regardless of who's found to be in violation)
then liquidation of awards
If it goes the full process, we'll definitely be into 2026 (but for the record, I don't believe this will be allowed to proceed in June).

Also, (and my apologies if this sounds negative), we must remember that if all goes to plan, we'll be selling at asset level. This means it's highly likely that proceeds will get returned to SHs as non franked dividends after the exploitation of any relevant local tax breaks and an ATO class ruling (this takes another 3 months). The ROC% will be relatively small.

Unfortunately this is something that the majority of SHs won't care about given they are off shore entities). Forget share buy backs etc. The only way around it as i see it is if its a deal with a RIO whereby we take equity (highly unlikely) or a very small chance of relisting with a similar asset purchased from Manono sale funds (again highly unlikely and a ridiculous amount of red tape) - again majority of large SHs are based off shore and happy with cash.

I've just been through a very similar example with LLL / FFX (forced sale to the Chinese at asset level in Mali) and PSC (sold to Chinese at asset level in Zimb). My asshole has only just recovered after the ATO turned it into a butchers bin. (Although for PSC, I was a non resident so didn't pay any tax).

If you have enough in this (and its in your own name) and it pans out how I expect, its probably worth moving to Dubai and playing golf for 2 years in order to get the non tax residency status for Aus...

I’m aware of what awards are. There are no appeals at the ICSID. 'Liquidation’ of $6.2b USD if needed will take us well beyond 2030 imo

Award - ICSID Convention Arbitration (2022 Rules) | ICSID

There is only one Award in an ICSID case, and it is the Tribunal's last decision which disposes of the entire case. Any other ruling before the final Award, such as a decision on liability without an assessment of damages, is not considered an Award, and recourse under the Convention cannot be...

icsid.worldbank.org

Award - ICSID Convention Arbitration (2022 Rules)

There is only one Award in an ICSID case, and it is the Tribunal's last decision which disposes of the entire case. Any other ruling before the final Award, such as a decision on liability without an assessment of damages, is not considered an Award, and recourse under the Convention cannot be taken against it until after the Award is rendered.

If a Tribunal issues a decision upholding its jurisdiction, such decision forms part of the eventual Award. If a Tribunal decides that it has no jurisdiction, it renders an Award.

The Award is final and binding and can be recognized and enforced in any ICSID Member State (Article 53 of the ICSID Convention). There is no appeal against an Award, but specific post-Award remedies are available under the Convention.

The Tribunal must render the Award as soon as possible after the last submission in a case (e.g., a post-hearing brief) and in any event within certain timeframes depending on the type of Award being issued:

* 60 days on objections that claims are manifestly without legal merit (Arbitration Rule 41(2)(e))
* 180 days if the Tribunal declines jurisdiction in a bifurcated proceeding addressing jurisdiction (Arbitration Rule 44(3))
* 240 days in all other cases (Arbitration Rule 58(1)).

These time limits are counted from the last submission on the matter (or from Tribunal constitution if all submissions were filed before constitution) and the Tribunal must use best efforts to comply with them (Arbitration Rule 12(1)). If the Tribunal cannot comply, it must send a notice explaining the delay and provide an estimate of the date when it will render the Award.

 

[Dijon101]

Hi Shire, as I mentioned the ROC% will be a relatively small component, especially if we manage to realise anywhere near full (or even half) value on the sale of the asset.

The ROC component is returned to SHs tax free, essentially you are distributing sunk costs to SHs, easy. The rest of the capital has been derived from the sale of asset (over and above the money you invested to buy and improve the asset). I'm tipping that the ROC component will be less than 5% of the total return to SHs.

So just as an example and theres a couple of big IFs (and completely hypothetical) - but IF we split the north in exchange for compo payment (say USD$500mill) and IF we realise a sale of the south (with all things considered for USD$3.5bill) we'd end up with USD$4bill = AUD$6bill
If our sunk costs were AUD$300mill (assuming 3.5bill SOI) the dist would look something like this:
5,700,000,000 unfranked divvy (unfranked as we've paid no tax in Australia to frank against)
300,000,000 ROC (untaxed)
Or
AUD$1.62 ps unfranked divvy (taxed at your marginal rate as income if held in personal name)
AUD$0.086cps ROC (untaxed)

Now, please don't shoot the messenger with the valuation assumptions, its purely hypothetical (add a zero to each line item for all i care). I want 12 bucks a share as much as anyone...

The only caveat on the above would be the taxation treatment of any awards for compensation - I'm not experienced with this scenario, but I would imagine that once its distributed, it would be taxed as income.

FYI, In the LLL example, they are returning the proceeds of the forced sale to Ganfeng in 2 tranches after paying local CGT and other liabilities. The first tranche was distributed exactly as above (different numbers tho). The company may propose an acquisition to SHs with the second tranche - they claim to have been in DD with several listed entities (i.e. PMT or WR1 as examples). If this was voted on favourably by SHs then an aquisition of the relevant company would take place and eventually the new co would re-list with the acquired company as its main asset / on going concern - SHs could then sell on market triggering a CGT event rather than receive an unfranked divvy that effectively counts as personal income. This takes a long time - think additional 12 months all up...

Hope this clarifies, and please seek your own advice as I'm on my 4th red....

Cheers!

Appreciate all your replies and information.

 

[Frank]

Splitting the North for Compo ?
I am hoping the US tells DRC if you want protection for minerals that the North must be returned to Dathcom / AVZ.as Comminiere /Zijin have no legal right.
Highly unlikely that the corruption shown by Zijin that they will seek ICC.
Trump will certainly show no compensation towards China.

How can it be sold to Zijin again when they Comminiere / Zijin think they can and are proceeding to mine it.
Need a Presidential decree from Felix to suspend Zijin and Comminiere from Manono.

https://x.com/brendo726/status/1912439054987325592

 

[Frank]

https://x.com/anonymous_seeu/status/1912422662477107541

https://x.com/Twinkle887788/status/1912446018073030807

 

[Aeolian]

3 months deliberation
then court hands down findings
then awards (think of this as sentencing)
then appeals process (inevitable regardless of who's found to be in violation)
then liquidation of awards
If it goes the full process, we'll definitely be into 2026 (but for the record, I don't believe this will be allowed to proceed in June).

Also, (and my apologies if this sounds negative), we must remember that if all goes to plan, we'll be selling at asset level. This means it's highly likely that proceeds will get returned to SHs as non franked dividends after the exploitation of any relevant local tax breaks and an ATO class ruling (this takes another 3 months). The ROC% will be relatively small.

Unfortunately this is something that the majority of SHs won't care about given they are off shore entities). Forget share buy backs etc. The only way around it as i see it is if its a deal with a RIO whereby we take equity (highly unlikely) or a very small chance of relisting with a similar asset purchased from Manono sale funds (again highly unlikely and a ridiculous amount of red tape) - again majority of large SHs are based off shore and happy with cash.

I've just been through a very similar example with LLL / FFX (forced sale to the Chinese at asset level in Mali) and PSC (sold to Chinese at asset level in Zimb). My asshole has only just recovered after the ATO turned it into a butchers bin. (Although for PSC, I was a non resident so didn't pay any tax).

If you have enough in this (and its in your own name) and it pans out how I expect, its probably worth moving to Dubai and playing golf for 2 years in order to get the non tax residency status for Aus...

I seriously hope if there is a deal it’s not like the Leo lithium one and we don’t get the majority paid out as a unfranked dividend.

This would be a terrible result for retail Australian investors who have already been through enough pain. For those in the top tax bracket, losing 48% of any dividend in tax to the ATO would be an absolute kick in the head.

 

[Hudnut]

Having an unfranky divvy could really suck, depending on your situation.

Assuming an investor is on a highest marginal tax rate is 50% for round numbers:

Example 1 - 100% increase in value from original purchase.
- Cost base is $500K (eg. bought for 50c/share)
- Value of return is $1M. (eg. equivalent of $1/share)

Returned as capital
If $1M returned as capital (shares etc) and sold, CGT discount of 50% on $500K gain is $250K.
Tax paid is $125K and Investor keeps $875K.
Overall profit from original $500K investment is $375K.

Returned as divvy
If $1M returned as divvy, then tax is $500K, and Investor keeps $500K.
No profit on original $500K cost base, and Investor has still has a $500K unrealised capital loss from the unsold and unlisted shares.

Example 2 - 400% increase in value
Even at a cost base of $250K and returned value of $1.25M:
Return as capital would mean tax of $250K and Investor keeps $1M with a $750K profit
Return as divvy would be $625K in tax, Investor keeps $625K with a $375K profit and a $250K unrealised capital loss.

Example 3 - 50% increase in value
At a cost base of $500K and returned value of $750K:
Return as capital would mean tax of $75K and Investor keeps $675K with a $175K profit
Return as divvy would be $375K in tax, Investor keeps $375K with a $125K loss and a $500K unrealised capital loss.

Unless I'm missing something, if you are on the top marginal tax rate (again, using 50% for round numbers) not being able to use your cost base as a deduction when you get the proceeds as a dividend (which is income and not capital gain), means you need to make at least a 100% profit just to break even.

Is this correct?

 

[Hudnut]

Having an unfranky divvy could really suck, depending on your situation.

Assuming an investor is on a highest marginal tax rate is 50% for round numbers:

Example 1 - 100% increase in value from original purchase.
- Cost base is $500K (eg. bought for 50c/share)
- Value of return is $1M. (eg. equivalent of $1/share)

Returned as capital
If $1M returned as capital (shares etc) and sold, CGT discount of 50% on $500K gain is $250K.
Tax paid is $125K and Investor keeps $875K.
Overall profit from original $500K investment is $375K.

Returned as divvy
If $1M returned as divvy, then tax is $500K, and Investor keeps $500K.
No profit on original $500K cost base, and Investor has still has a $500K unrealised capital loss from the unsold and unlisted shares.

Example 2 - 400% increase in value
Even at a cost base of $250K and returned value of $1.25M:
Return as capital would mean tax of $250K and Investor keeps $1M with a $750K profit
Return as divvy would be $625K in tax, Investor keeps $625K with a $375K profit and a $250K unrealised capital loss.

Example 3 - 50% increase in value
At a cost base of $500K and returned value of $750K:
Return as capital would mean tax of $75K and Investor keeps $675K with a $175K profit
Return as divvy would be $375K in tax, Investor keeps $375K with a $125K loss and a $500K unrealised capital loss.

Unless I'm missing something, if you are on the top marginal tax rate (again, using 50% for round numbers) not being able to use your cost base as a deduction when you get the proceeds as a dividend (which is income and not capital gain), means you need to make at least a 100% profit just to break even.

Is this correct?

And if the above is correct and you had an SMSF, wouldn't you be better off selling your personally held unlisted AVZ shares to your SMSF for pennies, so the dividend would be taxed at 15% instead? This would also realise your capital loss in personal tax.

 

[Ashlee]

An interesting article

RDC : La plus grande banque suisse bloque les fonds de la famille Tshisekedi, estimés à 8 milliards de dollars, mais les experts soupçonnent qu’une partie de la fortune se trouve au Qatar et aux Émirats arabes unis

Par JeN-LUC KIENGE Dans un coup de théâtre financier qui secoue les milieux bancaires et politiques, la plus grande banque suisse, UBS, a confirmé avoir gelé des fonds appartenant à la famille Tshi…

vacradiointernational.com

 

[JNRB]

An interesting article

RDC : La plus grande banque suisse bloque les fonds de la famille Tshisekedi, estimés à 8 milliards de dollars, mais les experts soupçonnent qu’une partie de la fortune se trouve au Qatar et aux Émirats arabes unis

Par JeN-LUC KIENGE Dans un coup de théâtre financier qui secoue les milieux bancaires et politiques, la plus grande banque suisse, UBS, a confirmé avoir gelé des fonds appartenant à la famille Tshi…

vacradiointernational.com

Good opportunity for Felix to sacrifice Zijin & Cominniere at the alter to show how non-corrupt he is, and sign a framework for 'responisble' development with USA

 

[Azzler]

Having an unfranky divvy could really suck, depending on your situation.

Assuming an investor is on a highest marginal tax rate is 50% for round numbers:

Example 1 - 100% increase in value from original purchase.
- Cost base is $500K (eg. bought for 50c/share)
- Value of return is $1M. (eg. equivalent of $1/share)

Returned as capital
If $1M returned as capital (shares etc) and sold, CGT discount of 50% on $500K gain is $250K.
Tax paid is $125K and Investor keeps $875K.
Overall profit from original $500K investment is $375K.

Returned as divvy
If $1M returned as divvy, then tax is $500K, and Investor keeps $500K.
No profit on original $500K cost base, and Investor has still has a $500K unrealised capital loss from the unsold and unlisted shares.

Example 2 - 400% increase in value
Even at a cost base of $250K and returned value of $1.25M:
Return as capital would mean tax of $250K and Investor keeps $1M with a $750K profit
Return as divvy would be $625K in tax, Investor keeps $625K with a $375K profit and a $250K unrealised capital loss.

Example 3 - 50% increase in value
At a cost base of $500K and returned value of $750K:
Return as capital would mean tax of $75K and Investor keeps $675K with a $175K profit
Return as divvy would be $375K in tax, Investor keeps $375K with a $125K loss and a $500K unrealised capital loss.

Unless I'm missing something, if you are on the top marginal tax rate (again, using 50% for round numbers) not being able to use your cost base as a deduction when you get the proceeds as a dividend (which is income and not capital gain), means you need to make at least a 100% profit just to break even.

Is this correct?

You know it never occurred to me that you wouldn't get to reduce your income with your cost base for a divvy payout, after missing out on the CGT discount, that's just a real kick in the teeth.

However, I suppose going forward, you still get to use that loss to offset future gains, so you don't miss out in the long term.

 

[Retrobyte]

An interesting article

RDC : La plus grande banque suisse bloque les fonds de la famille Tshisekedi, estimés à 8 milliards de dollars, mais les experts soupçonnent qu’une partie de la fortune se trouve au Qatar et aux Émirats arabes unis

Par JeN-LUC KIENGE Dans un coup de théâtre financier qui secoue les milieux bancaires et politiques, la plus grande banque suisse, UBS, a confirmé avoir gelé des fonds appartenant à la famille Tshi…

vacradiointernational.com

Send the $8bn straight to us

 

[Azzler]

An interesting article

RDC : La plus grande banque suisse bloque les fonds de la famille Tshisekedi, estimés à 8 milliards de dollars, mais les experts soupçonnent qu’une partie de la fortune se trouve au Qatar et aux Émirats arabes unis

Par JeN-LUC KIENGE Dans un coup de théâtre financier qui secoue les milieux bancaires et politiques, la plus grande banque suisse, UBS, a confirmé avoir gelé des fonds appartenant à la famille Tshi…

vacradiointernational.com

Sickening isn't it.
The ruling class in the DRC are some of the most revolting people on earth.

 

[Randenj]

An interesting article

RDC : La plus grande banque suisse bloque les fonds de la famille Tshisekedi, estimés à 8 milliards de dollars, mais les experts soupçonnent qu’une partie de la fortune se trouve au Qatar et aux Émirats arabes unis

Par JeN-LUC KIENGE Dans un coup de théâtre financier qui secoue les milieux bancaires et politiques, la plus grande banque suisse, UBS, a confirmé avoir gelé des fonds appartenant à la famille Tshi…

vacradiointernational.com

So what do you reckon: A Congo someone has started to play 'silly buggers' (again), so an American someone who knows a Swiss someone decided to give their Swiss someone a call and suddenly the Congo someone has an $8bn reason to stop mucking everyone around again?

 

[Exo324]

No one in public office should be able to amass 8bill when their country is stricken by poverty. Sickening.

 

[oxxa23]

Having an unfranky divvy could really suck, depending on your situation.

Assuming an investor is on a highest marginal tax rate is 50% for round numbers:

Example 1 - 100% increase in value from original purchase.
- Cost base is $500K (eg. bought for 50c/share)
- Value of return is $1M. (eg. equivalent of $1/share)

Returned as capital
If $1M returned as capital (shares etc) and sold, CGT discount of 50% on $500K gain is $250K.
Tax paid is $125K and Investor keeps $875K.
Overall profit from original $500K investment is $375K.

Returned as divvy
If $1M returned as divvy, then tax is $500K, and Investor keeps $500K.
No profit on original $500K cost base, and Investor has still has a $500K unrealised capital loss from the unsold and unlisted shares.

Example 2 - 400% increase in value
Even at a cost base of $250K and returned value of $1.25M:
Return as capital would mean tax of $250K and Investor keeps $1M with a $750K profit
Return as divvy would be $625K in tax, Investor keeps $625K with a $375K profit and a $250K unrealised capital loss.

Example 3 - 50% increase in value
At a cost base of $500K and returned value of $750K:
Return as capital would mean tax of $75K and Investor keeps $675K with a $175K profit
Return as divvy would be $375K in tax, Investor keeps $375K with a $125K loss and a $500K unrealised capital loss.

Unless I'm missing something, if you are on the top marginal tax rate (again, using 50% for round numbers) not being able to use your cost base as a deduction when you get the proceeds as a dividend (which is income and not capital gain), means you need to make at least a 100% profit just to break even.

Is this correct?

Your numbers are fine, it's just that the company ordinarily would wind up or do a capital buyback to assist realising the majority of your capital loss.... yo be used against future capital gains..... the tax still sucks for sure but.

 

[tonster66]

8b on a presidents salary, makes Biden look like an amateur

 

[whales]

Send the $8bn straight to us

So what do you reckon: A Congo someone has started to play 'silly buggers' (again), so an American someone who knows a Swiss someone decided to give their Swiss someone a call and suddenly the Congo someone has an $8bn reason to stop mucking everyone around again?

Security for minerals has just taken on another level.
If he was desperate to stop M23
the incentive to avoid ICC just increased 100 fold.
What a pathetic response " smear campaign "

 

[Spikerama]

Sickening isn't it.
The ruling class in the DRC are some of the most revolting people on earth.

Interesting analogy that only the tip of the iceberg is frozen.

 

[Spikerama]

@Frank @JAG

Forty Five. Sharpen those knives.

 

[Frank]

https://x.com/brendo726/status/1912622738164133889