Ann: Trading Halt , page-6

hhm,,
Im not really liking this capital raising for the folowing reason.

The new issue price is at a 28% discount to the new NTA, but the current price is still 30+% discount to NTA. Meaning we are trading in some of our equity (1 for 1) to realise less gearing. - this isnt too bad, however, because of the trading halt today, and the record date on the 30th, it means that only current shareolders get this opportunity, and it is effectively forcing us to put our money in, or suffer severe dilution (from a 1 for 1).

I dont like my hand forced, and the offer is not to our advantage in the short term (might be better long term however).

Im usually a fan of capital raisings allowing me to increase my stake in an undervalued co, the figures are as follows:

Before Raising sp = 60c, NTA = 96c, Discount 37.5%
After sp = 60c+48c/2 = 54c, NTA = 67c, Discount = 19.5%

We were better off before the raising imo....
we took a 20% value cut for a 20% gearing reduction, where it should ave been more like 10% value for 20% gearing (when current gearing was abt 50%)

I still dont like it.... any thoughts?

SS