Who are the shorts?

[Palm]

Other the Bronte (sp) do we know?  I can't believe they all act in unison.   It seems that it may make sense to take a short position to keep a lid on the stock price to effectively make a starting takeover number of lets say $120.00 seem acceptable.  Let's say it takes a couple million short to manipulate the price, it sure is a cost effective way rather than having to buy the 45 million shares at let's say $180.00, it would save them billions.  I am just trying to understand the short theory, why their postion went up, they can't be stupid, but rather maybe a very savy way of keeping the lid on for an acceptable takeover bid?  We think we know there are non-conforming bids to come.  I am just trying to understand the short thesis, I got it 5 years ago, I don't understand it now, but they are clearly still fighting.  Any thoughts?

If anything, the only things I can think of are they are hoping they run out of cash, or they are hoping for some more uncertainty with the govt.

--Option-- It seems to me,that as long as they have their source (pipeline) from somewhere [ ??] ,they don't feel the need to cover quickly. As an aside, does anyone know if we are allowed to use any of the refinery 100 million dollar loan for upstream activity ? TIA

Sageo,

Here is the wording from the loan facility PR;  note Collin's comments and the wording that besides paying off the OPIC loan the proceeds can be used for "general corporate purposes".

Port Moresby and Houston, TX — InterOil Corporation (NYSE: IOC) (POMSoX: IOC) (“InterOil” or the “Company&rdquo announced that IOC and its subsidiaries, EP InterOil and InterOil Limited, have entered into a five year amortizing $100 million secured term loan facility with BNP Paribas Singapore (BNP), Bank South Pacific Limited (BSP), and Australia and New Zealand Banking Group (PNG) Limited (ANZ).

Borrowings under the facility will be used for repayment of all outstanding amounts under the term loan granted by Overseas Private Investment Corporation (OPIC) dated June 12, 2001 (currently net after Debt Service Reserve Account at $25.4 million), and general corporate purposes. The loan is secured by InterOil’s right, title and interest in the fixed assets of the Napa Napa Refinery in Papua New Guinea.

The secured loan facility bears interest at LIBOR plus 6.5%. Approval has been received from Bank of Papua New Guinea, and funding is subject to release by OPIC of all securities under the existing loan agreement, and other standard closing conditions.

Collin Visaggio, InterOil Corporation Chief Financial Officer, commented,
“InterOil is pleased to have the support and confidence of three of the largest banks operating in the South Pacific. We are delighted to have extended our banking relationship with BNP which has led our existing $240 million working capital facility since 2005, and strengthened our existing relationship with BSP, Papua New Guinea’s largest bank, and ANZ, one of the region’s largest lenders. This financing should allow us to maintain our accelerated pace of upstream activity while we complete our negotiations with the PNG State and conclude our LNG partnering process. At this stage we are pleased by the constructive dialogue with the State and the increased interest in investment in Papua New Guinea following the successful election and formation of the strongest coalition government in the country’s history.”

Ian Clyne, BSP Group Chief Executive Officer, commented,
“We are proud as a Papua New Guinea bank to be involved as co-lead arranger of this international syndication, and being able to strengthen our partnership with InterOil, one of PNGs leading organisations. InterOil and BSP, are committed to this emerging nation and its local communities.”

Mark Baker, ANZ Chief Executive Officer PNG, commented,
“InterOil has been a long and valued relationship of ANZ and we are pleased to extend our industry know how and balance sheet support as Mandated Lead Arranger in this transaction. As an international bank with a 100-year presence in PNG and an extensive network across Asia Pacific, we are focused on providing international financial expertise and regional specialists to support the development of key industries in PNG for the benefit of our clients and the wider community.”

Pierre Joseph Costa, BNP Paribas’ Regional Head for Structured Finance APAC and Japan, commented,
“We are proud to be part of the changing landscape in PNG, and this loan marks a further commitment of the Bank’s relationship with InterOil, whom we have been partnering with since 2005.”