Ironically I have spent most of my working life in the "big instos".
The cost to them is negligible because they sub let the underwriting.
The underwriting insto gets a fee from SLR and derisks this by giving other instos sub underwriten allocations. Yes this was fully underwritten by RBS - pointlessly it seems given the raise price to current.
The reason its cheaper than a rights issue is because instos do not require expensive PDS's; plain and simple.
My gripe is simple - the rush for money is not (from what I can see) needed yesterday.
With no need to rush the balance sheet fix, there is no need to save a few 100,000 in corporate (tax deductible) costs to simply throw instos freebies.
This is not an equitable position for a company not in stress. This is the kind of thing Lynas does.
SLR Price at posting:
95.0¢ Sentiment: LT Buy Disclosure: Held
