CFU 0.00% 0.4¢ ceramic fuel cells limited

consolidation

  1. 7,432 Posts.
    Rather than issuing more shares at 5/2 cents whatever,there is another Option which I think CFU will take.

    This is Consolidation.

    How this works-
    CFU has currently ~350mil Issued Shares priced under 10 cents.
    Consolidation is the Issuing of New Shares at a more "respectable"/share price.

    It is achieved by declaring that say 20 existing old shares are NOW "encapsulated" in 1 [one] New Share.
    This then "technically" values a existing 20 share'parcel' at 5 cents "old" at $1 for "new".

    CFU would no longer have 350 mil on Issue but approx 17.5 mil.

    At this stage the Company then looks to Issue these New Shares to "Interested" parties at $1 to raise their Capital Requirements.

    I suggest/reckon that CFU would be looking for $40/50 million.One doesn't go this consolidation route in order to raise "chicken feed" like 5/10 mil$$.
    One does it to be truly Viable in the Market.Effectively the "Old" shareholder are "replaced" by new capital investors who require solid Equity for their Investment.

    So all existing Substantial Holders and others are diluted,replaced by "new'n'improved" without having to be actually bought out/taken over.

    For current "retail" Holders,you are in the position that your current holding at say 35cents Break Even will,after a 20:1 Consolidation,require a $1 to $7 price rise to break even.However such a price rise for the New Share "Getters" will be a Massive Capital Profit.

    Also another paper shuffling that will occur before or after Consolidation will be the compulsory closing of Unsaleable parcel positions.These are any worth less than $500 even though they may initially have been say 10,000 bought at $1 in the "old" times.

    I have reasons or more so Angles as to Why any such consolidation will be most likely 20:1 rather than say 5:1 but I'll discuss these later if anyone's interested.

    Happy Trading.
 
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