Announcement anytime!!, page-143

How exactly are all retail holders going to get burnt? They have access to the same 4/9 rights issue as the institutions.

RFC couldn't have loaded up whilst waiting on the news - daily volume was approx 1M shares. So it would have taken almost a third of a year.

Also, TGS couldn't have asked for more money in the loan - overloading on debt got them into this mess. The debt providers asked for an equity raising as part of the debt covenants (minimum of US$10M). Consequently, the debt and capital raise are a package and needed to be presented as such. Given that RFC and IFC committed to US$15M, TGS could have just had the institutional raise and left it at that. But they opened it up to other institutions AND retailers. So, hardly shafting retail holders.

Loading up on debt got TGS into this mess in the first place. Shifting that debt out of current liabilities into long-term debt, sets up for survival and improved performance. The capital raising is required by the lenders to ensure that the company is resilient whilst Cu prices are depressed.

The RFC investment helps ensure that the minimum amount required for the CR to meet the lenders requirements are met - otherwise they could have pulled the debt package. Now both retail and institutional holders have the right to load up on the issue under the same terms.

In my view its the people that bought in at 10c++ that have the most to gain from the raise, as they can reduce their average price to a greater extent. But will depend on whether they have the funds to do so. Having said that next Tuesday will definitely be interesting as holders potentially liquidate some of their holdings to fund the exercise of their rights..

Will it fall below 4.7c, maybe. It may at least head down towards those levels. Will there be sufficient volume of sellers at those prices to make that a better option than exercising rights - unlikely in my view, given the volume of rights and where the company is now.

TGS will be debt and equity funded (to a minimum of US$15M) with interest only payments for a year, and funds to increase capacity. I'm expecting some short-term volatility whilst the retail raising is completed, but things to improve thereafter. So, don't fall for the rather transparent shorting now - TGS is in a much better position than it was even a few weeks ago. I'm planning to enjoy the Xmas break and exercise my rights.

As always DYOR.