re: cgc - any thoughts - ias
I have been a very longterm suffererin CGC so I approached the recon and relisting with some relief as an opprtunity to close the experience.
However have changed my mind totally and in fact bought some more yesterday.Why? i received the prospectus for a raising they are doing to existing shareholders at 50c-you can apply for $4000 worth only. with this raising is the whole story.
1. It appears Rothschilds and others have put together a reverse takeover of CGC by the US group WWTS. WWTS have 38.80 % of shares and probably will go to 58% over next yr.
2. WWTS is really one fellow who set up an online gambling business in Antigua in 1991.
Prior to talking about the business that WWTS has done it is useful to look at what has occured.
a. cgc did a 1 for 10 recon
b. then issued 61.5m cgc share to Tasman corp ( this appears to be a group of the advisors such as Rothschilds who appear to have introduced the parties ( my guess))
c. Tasman buys WWTS for 40m cgc shares and $31.5m au ( this is a convertible note which WWTS can exercise at 44c a shre into CGC scrip)-so total cost of WWTS is approx $51.5m au. Total deal with Tasman cost $58.5m.
d. CGC then issues 24m shares at 50c -raises $12m for capital purposes.
e. then the Rothschilds exec who worked on deal becomes the MD of CGC and the old Board all leave. Richard Baker is interesting as he was at Rothschilds for 15yrs and until recently was a Director of Investment Banking. He previuosly advised Aristocrat and sky gaming so appears to understand the big picture. The good thing is he has 3.5m shares-always like management to have a lot of share in co-focuses the board on share price.
So that is where we are today -but what of the business.
The old Sportsbet business of CGC was going nowhere really-increased revenue over the yrs but made nothing and continually had to go to old shareholders-they had no size.
what about WWTS though-thats when i got interested
31/12/2000- gross of US$602m,gross profit US $18.5m and net after bad debt of 9.8m and then ebit of US$ 3m
31/12/2001 gross of $562m,gp of 23m-net profit US$ 10.6m
31/10/2002 gross of 444m, gross profit 14.7m and net profit until end of Oct of 10.1m ans EBIT of US$ 3.861m
So you would think that CGC nows has a real chance of making some money-nothing certain but a lot better chance than before.
