Ann: PEN Investor Update - May 2012 , page-60

Was thinking the same thing last night after reading Vintages post.

You beat me in getting pen to paper.

Creep rulings for holding increase won't be sufficient (can't remember the no's but something like 1% every 6 months) will allow you to exceed the 20% with out breaching.

Still thinking about how they can use Pala's facility & issue the necessary options/shares without breaching. I suppose if only options not an issue until they expire & have 2 years to sort it out..ie take over..

Would think some sort of capital raising at the same time to dilute holding is of no benefit to Pala, ie they have given up $x's to still only hold 20% of PEN (although market cap should have improved significantly). They are not doing this for love.

Perhaps another entity will hold the asset whilst 'lending' it to Strata or PEN for their use ie some sort of trust vehicle?.

Dont think it will happen like this, but I am sure they have plenty of aternatives

eg Pen as trustee for the PALA trust (Pala, PEN or some subsidiary of Pala would be the beneficiaries or some combination of these) & would be the 'owner' of the asset This will not appear on PEN balance sheet as PEN is only trustee. The debt would be a loan to the trust from PEN financed by the PALA facility?

Pala still hold 20% of PEN &....100% of the trust asset & they sell their shares/options to the PALA trust vehicle.

From what I can recall tust assets are viewed seperately to assets under control of the entity...Don't know how ASX view it though. I think they have a term 'controlling entity' but don't know if it encompasses trusts..

Enough rambling, any other thoughts?

M