Long time holder but stopped posting when TonyIndo arrived on the scene - impossible to compete with the quality of his posts!
I think it needs to be clearly defined that this is not an investment but an acquisition, an acquisition that is value accretive for shareholder since existing holders will acquire an asset that is worth circa $150m-200m for $50m.
On the topic of funding, it is pretty common sense in scenarios like this that there will be a rights issue to all shareholders to allow additional participation in upside, it is the most equitable approach. Short-fall will most likely be underwritten by a group of institutions. I suspect that this was the plan when Seneca got institutions involved in the previous raise - very strategic.
Given the conservative nature of management (and we have all had a crack at them in the past for this), it is most likely that they are waiting to complete their own due diligence before announcing to the market the company metrics such as revenue and EBITDA. Whilst this is my opinion its also best practices as well, as it is probably best that you don't rely on management representation at this point. Now what do you think will happen here when the company is able to talk to an EBITDA of say 10 to 15m per annum on current contracts? Its obvious - and its only the start now.
So in short, expect positive newsflow coming up. This is a great deal - good work to the team at TSN, especially Gary and also Cameron at Seneca. Don't underestimate what it would have taken to put this all together. Well Done!
BT
TSN Price at posting:
2.2¢ Sentiment: Buy Disclosure: Held
