Sorry I need to read the announcements more carefully. I now see that the placement is excluded from the interim distribution.
The announcement seems to however differ from the capital raised ex Kirsch last year in that the announcement refers specifically to a SPP. last year it referred to an underwritten rights issue. I think you cannot pro rata a SPP however any excess applications can be handled on a pro rata basis as I have been seeing of late.
I don't like conspiracy theories however it would be unlikely that Kirsh who owns 27.17 % per AFS would not have taken up at least 27.17% of the placement. I think that you will find he can acquire beyond his pro rata rights up to 34.99% of the company. The SPP up to $15000 - You cannot as I understand it acquire more than $15000 in all capacities - I know many people ignore this and purchase on all their HIN numbers but technically it is incorrect. So I wouldnt be surprised to see that Kirsch has moved up from his 27% and that he is not in favour of a massive dilution via the SPP so maybe that's why the discount was very low its to protect his interests - I dont think that very many investors are going to take up the $15000 as it in fact isnt enough of a discount to entice too many to acquire. Only 796 holders hold more than 100001 shares so in fact I cannot see too many doing it. There maybe a number who would buy smaller amounts but even if you sell at 41.5 c that's only a profit of just more than $500 after brokerage. On 6 HIN's that makes it worth it but on 1 its a CGT and a purchase at a new level. I wont be doing that my base cost is too low and I will end up paying more over than I would want to to the ATO and the profit would in fact probably me a negative.
In reality I just cannot understand this at all it just seems hasty and makes no sense unless there is something we cannot see.
1. Why would you buy in and not get the interim distribution and have a discount of 5%.
2. If you did buy in what's so great as any disposal will create CGT and as such you will or may end up owing more than you made by selling.
3. How can you rationalise this to shareholders -unless there is a targeted acquisition that you are looking at.
4. The discount probably wont persuade the smaller investors to take up more and the bigger investors are limited to the $15K
What is going on? Are they in need of cash? and why?
ABP Price at posting:
$2.08 Sentiment: Hold Disclosure: Held
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