Here is my take on the CR, the Company will be trying to push up the SP for 2 reasons over the coming weeks, firstly to attempt to get the options into the money and also and more importantly or at least just as important to save 50% of the CR with rule 7.1 of 15%.
I believe they will be trying to get the SP to 3.0 cents in the coming weeks due to the assumption that 50 percent of the 15% will be required by the end of the year. Remember a VWAP of 5 days prior to issue of new shares....this is a sentence to read and understand very carefully
Here are the sums:
Approximately 830,000,000 shares on issue, 15% of this is a maximum of 124,500,000 shares that can be issued under rule 7.1
If the SP is 1.9 cents VWAP then apply the 20% discount the issue price is 1.36 cents per share, which will be 110,294,117 shares issued, this is 90% of the maximum allowable issue under rule 7.1 only leaving 10% for the rest of the years CR opportunities, this leaves only 14,205,883 shares in the kitty for the rest of the year.
If the SP is 3.0 cents VWAP then apply the 20% discount the issue price is 2.4 cents per share, which will be 64,500,000 shares issued, this is 50% of the maximum allowable issue under rule 7.1 leaving 50% for the rest of the years CR opportunities, this leaves 62,000,000 shares in the kitty for the rest of the year.
This would be the preferred position for the company to be in, im sure most will agree
In conclusion I would expect to see the SP rise over the coming weeks prior to the CR and then probably fall back to the current SP without the CR pump.
See how it plays out but I think im on the money.
VRC Price at posting:
2.0¢ Sentiment: None Disclosure: Not Held
