capital raising, page-5

jamwolf

Obviously you are correct. Oceanique does have some value and I think your estimation represents an achievable outcome.
It is not only a matter of selling, but when they sell.
The Company has indicated that it is paying 10% pa on its debt.
Until the Capital raising is complete the Company owes $47M.
Unless other sales contracts are finalised in the meantime,the company will be paying about $393000 per month interest. (That probably includes both Dec. and Jan.)
Should they pay back the bank $12 M through capital raising, then they will still be looking at $293000 per month.
I haven't factored in any reported recent sales of land or apartments as, in the past, the company has said they have made sales, that appear to have been contracts, which did not eventuate into sales.
The interest, together with all the other ongoing costs I have previously mentioned, eats into the net value of sales the longer it takes to make those sales.
Many efforts and strategies have been tried to achieve sales and it is very hard going for the company.
My main concern however is that following a successful capital raising the company will only have $8M for operational costs, plus any incremental net gain from the drip sale of assets.
In my opinion this will not be enough to develop Stage 1 of Point Grey and Peel Water, so what is the point of the capital raising?
It may reduce debt to the Bank by $12m,(plus $5M at the end of the year) but if the company intends to develop Point Grey, then shareholders who buy into this Capital Raising, can expect either a further call in the near future or further borrowings/debt.(Back to where they started)
I believe it is fantasy to rely on the belief that there will be sufficient, timely, asset sales to generate enough net income for the purpose of developing Point Grey
If the aim is to try to hold on long enough to sell Point Grey, the gamble is that it will increase in value at a greater rate than the costs accumulating against it, and that it will sell in a timely manner.
Your comment that it is the role of a developer to develop and sell properties and if I don't like that model I should be looking at another sector, is incredibly simplistic.
The role of a developer is also to invest its shareholders money wisely in projects that meet market needs and add value to the communities in which it builds. Its modus operandi should, at all times, place the well being of those who purchase or invest in its products as paramount. Similarly it should always operate with the utmost integrity and transparency. Any company that loses knowledge and operational continuity through very high turnover of the Board and staff, whose losses are $115M in one year, with massive asset impairment and whose share price has hit 1cent, has every right to expect responsible scrutiny and questions.
To do otherwise would be irresponsible. It is not only shareholders money, but it is also the well being of members of the public who have purchased a company product,the value of which can be manipulated by others.
Responsible investment in the property market unfortuneately requires that you don't always believe the last person you spoke to, or order your affairs based on a simplistic formal 'Announcement'. A healthy level of research and cynicism is vital to survival in this sector of the market.
Right now, I cannot see that much has changed from the previous 2 years or how this current capital raising,in its own right, really moves the Company forward.