Komodoguy,
I may of course be wrong, but I don't see the need or the desirability for a cap. raising.
Dealing with DESIRABILITY first:
1/ Many shareholders would not have too much appetite for putting in further funds after the last fund raising.
2/ To be successful it would have to be done at below current market prices, at a discount to NAB, which dilutes values for current shareholders.
3/ Given the state of play of world stockmarkets in general, now is not the time to be asking shareholders for money if it can be avoided.
The Boards role is to MAXIMISE shareholder value.
A cap raising would not do this.
As far as NEEDING to raise capital goes:
1/ They should be able to bring in somewhere north of $50 Mill by bringng their credit terms more into line with the "favoured few"..... from 180 days to 30 days.. this is happening
2/ Suspending dividends for a further 12 months( retaining ALL profits will give them another lets say $50+ mill.
3/ They are already making cost cutting moves which will save a few more $mill.
4/ They are looking at some asset sales, any one of which could bring in $100+ mill.
5/ As mentioned in their latest announcement there are one off costs which will not recur..so future profits should improve.
All this I acknowledge is very much " back of the envelope stuff, as I am obviously not privy to the internal figures, but even allowing for this, it will bring in more than enough to satisfy their banking covenants WITHOUT a cap raising.
My comment on the
"impact of foreshadowed regulatory changes" which is raised in the latest announcement, and sounds very negative on face value.
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The government needs the pharmaceutical wholesalers to remain viable to deliver medication to the 5000+ pharmacies and hospital in Australia.
This supply chain is a vital link in the overall health of the nation.
Equally the overseas generic drug manufacturers need a distribution/supply chain for their products, so it is essential for them for Sigma and others to be viable.
This WILL be taken into account along the way
Just like the recent mining tax fiasco it needs some more work, but reality will eventually prevail.
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So my back of the envelope calcs/reasonig is:
1 Sigma does not need a cap raising
2 Sigma is worth significantly more than its current price, or ASPENS opportunistic bid.
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But I am but a humble customer of 30+ years standing and as I'm not on the board, and have no say in these things, who knows !
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