well done cba, page-27

What a terrific debate.

Pegasus, you present a well-reasoned glass-half-full view.

However, I don't buy your view that the reason management delayed the capital raise was due to their lack of confidence in the production outlook. In fact if they had good visibility over what was to come, then they'd be sailing pretty close to the wind in terms of disclosure to have:

1. made the December announcement; and
2. not informed the market about what they expected in Jan and Feb.

Their competence is highly questionable (decide to classify CCU as a producer, just in time for two of the worst production months in the past 12) and their lack of faith in the company is there for all to see (bad enough that they won't buy shares, but the CEO won't even risk any of his compensation).

If their actions weren't amateurish, then perhaps they were hamstrung by Magna and the CBA. Either way, they were ineffectual.

It looks to me like Magna has given up on CCU (not underwriting the SPP and not even insisting on a SPP structure that would allow it to retain its relative stake) but probably had to be dragged kicking and screaming to accept a position that will see its existing stake (all purchased way above the SPP price) significantly diluted.

This is the first SPP that I've seen be conducted as a necessity to pay down debt but without confirmation of an underwriter. Patersons have given themselves the full SPP timeframe to ring around clients and see if they want to have a bet on the silver price. If the POS keeps trending up, they may get it away (their clients are looking at picking up 35-50% of CCU for $8m .... yes, I do expect the price to fall over the last 5 trading days, and no, I don't expect much of the $8m to be supplied by existing shareholders). If the POS stops trending up, it wouldn't surprise me in the least if Patersons pulled out.

And all this assumes that the ASX will allow the over-25%-shareholder-approved dilution to occur prior to another shareholder vote.

GLTA.