Great post, Yep I'm totally with you in your confidence of DFT passing through and doing so in stride. I believe that management has been straight down the line with us and have announced when they have needed too. There is a lot of different thoughts that go around an investors mind particularly in these small caps where there is potentially a large percentage move in SP in either direction on the announcement of news as opposed to the one story that management will invariably have and will announce on; all the other thoughts and views just spread and lay seeds of doubt particularly here in HC land.
ECT said that they would announce if there was problems gaining funding from Monash; they announced that they were experiencing some delays in funding by Monash and they gave the details on the contingency on offer - $6m placement from 300m shares at 2c. Some have raised the question of why would someone offer funding for 300m shares at 2c given that the original sum required was $4m and that the share price was at 1.5c or so when that was announced. Well for one I would probably offer it; it would look like a very generous and a very good placement being offered; but looking at it also from the way Monash would look-we can get 200m shares at 2c in return for $4m or 300m shares for $6m now; IMO they have a fair idea of where the SP will end up after DFT completion is announced. If we just for arguements sake say 4c ..... Well that's a straight 4 or 6 million gain seriously good business, double that profit gain by every 2c the SP rises......Try and buy 200 or 300m shares on the market would just drive price up over the 2c mark. I think I'd be wanting to make the placement at 2c , many shareholders would think of it as a good deal; ECT get 6 million in lieu of $4m; IMO the biggest winners would be Monash by getting a crap load of shares at a price that would IMO be left for dead once the funding & DFT completion was announced.
Obvously ECT would prefer to get their cash through funding as opposed to the 300m shares ; I don't think that ECT are looking at alternative overall funding to monash .; Adams words in the e-mail that I received from him were - "Monash advancing, but we have contingency just in case they are further delayed" - reading that, Monash are making progress in the funding, just experiencing some delays 'advancing' ,, they have not hit a brick wall; it's on going; ECT are confident enough IMO to push contingency to the side for the time being. They have contingency - the word is contingency , it's not alternative....Does this mean that if funding is delayed (delayed- not stopped; still running) , that they can take up the $6m ; does this suggest a delay in an over all larger Tranche of funds; well it must be if Monash are able to give us $6 million in lieu of the $4m originally required; They wouldn't have a problem gaining $6m from a financial institution alone if they were able to fund the placement themselves......
IMO - the 6m is there if they need it and Adam has stated that ( subject to SH approval) . DFT is on track and won't be compromised. 6m ( it's there if required) + Arup = Completion of DFT is on target and as Adam has said, it won't be compromised. I suppose the question that some maybe asking themselves.... Would it be in Monash's interest to delay and to get 300m shares at 2.0c? Who knows for sure; likely hood is that they have a good relationship with ECT, they would rather push through the entire Tranche and keep things moving and avoiding any unneccessaries that could potentially arrise due to self inflicting delays.
People may want to wait on the sidelines until DFT is announced....IMO the odds are highly stacked in favor of it; as Samwiise has said and IMO you wont be picking them up at 1.5c , considerably higher I'd imagine....
ESI Price at posting:
1.5¢ Sentiment: Buy Disclosure: Held
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