Ann: Completion of Entitlement Issue, page-29

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Braydan97

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17/09/18

23:31

Post #: 35658155
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Originally posted by zebster ↑

On further reflection after today's announcement, I think that the balance of power probably lies with BMM now. If we assume that my earlier estimated percentage ownership splits are reasonably accurate (i.e. Squadron and BMM each will own ~18%), then that's an equal footing.

But what about BMM's US$17.5m CN? They have the right to convert @9c/share. Based on current Fx the CN has a par value of (say) AU$24m, which would equate to 267m shares to BMM if converted that loan into equity. Assuming all other things remain unchanged on the equity front, if BMM converted the CN into shares then their percentage ownership in POS would increase to 25.4% and Squadron's holding would be diluted down to 16.3%*. There would be nothing to stop Squadron from purchasing more shares on-market to top-up its holdings to get back close to 20%, but Squadron wouldn't be able to cross that magic 20% level without launching a T/O bid. BMM, on the other hand, already has pre-approval to cross above the 20% ownership threshold (but only as a result of any future CN conversion), pursuant to the shareholder approval that was granted at the EGM on 20/01/16 (Resolution 1) as part of ratifying this current CN when previously restructured issued to JB. Presumably that pre-approval transfers with the ownership from JB to BMM?
(Handy links: 2015 Independent Expert's Report (p.2); Notice of Jan 2016 EGM (Resolution 1); and Results of Jan 2016 EGM).

For me, AF is not the BOSS of POS at this juncture. Well, not unless he has alliance(s) with any of the other yet-to-be-announced major shareholders. Maybe Squadron should have made a play for the CN from JB before BMM turned up?

*Calcs:
Pre-CN conversion total shares on issue: 2,638m.
Post-CN conversion total shares on issue: 2,905m (i.e. 2,638m + 267m).

BMM shareholding pre-CN conversion: 472m.
BMM shareholding post-CN conversion: 739m (i.e. 472m + 267m).
BMM shareholding post-CN conversion: 25.4% (i.e. 739m / 2,905m).

Squadron shareholding pre-CN conversion: 473m
Squadron shareholding post-CN conversion: 473m (unchanged)
Squadron shareholding post-CN conversion: 16.3% (i.e. 473m / 2,905m).

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Great to see things improving on this one!The work you put out is first class mate!I could read your posts all day!Time to get back in nearly!

POS Price at posting: 5.0¢ Sentiment: Buy Disclosure: Held
4 Upvote

0 Great analysis

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