Do you mean this, from a 3 weeks ago at the AGM?:
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[Gavin Rezos]:
Before I go to the proxies, let me just explain this resolution.
You'll see it in many companies that have this resolution. The ASX gave the authority… you have a 15% authority to issue, provided you haven’t use it in other circumstances and has to be renewed. This resolution gives you an additional 10% on a shareholder approval basis for certain circumstances where you want to follow that.
For us, we have said we don't need capital.
We have enough capital for what we're doing now. We have got 9.5 million in the bank. We have a debt facility which is a term facility, so we making use of our balance sheet.
We're now cash generating, in the last quarter there was cash generation so that's adding to the cash position.
However, if we get... listen, I'm talking theoretically in the future... if we get a very large defence sector order and a very large mattress order at the same time, which are multiples of where we are now, then we need working capital to fund this… and we can use debt purchase facilities, we can use other […] facilities, or we can have the flexibility if that makes sense to take some additional equity capital to make that happen.
Now part of the process of course is that, when you're dealing with the Department of Defence or you’re dealing with large economies in that space, they want to make sure you’ve got planned capacity to do what you’re doing.
And, by the way, it's only about working capital. We're a capital light model …when we scale up significant tonnes of formulation, it’s not us doing it, it’s our toll manufacturers, who have […] capacity ready to go.
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For a CR to come so close following Gavin's statements at the AGM, it is not unreasonable to expect that it must have been in the works as Gavin made the comments. Therefore, the CR should be for the reasons stated at the AGM and for no other reason. "Other uses" does not cut it for me.
If the CR is primarily so that Petra can get their fill at a cheaper price, and there are no immediate contracts, this is NOT protecting shareholder interests IMO. Near-future shareholder interests, perhaps, but not existing shareholders. If I wanted $15 million worth of AJX shares, I should pay the market rate for them. Guess what.. you can't get more than 450k shares without pushing the price up 20%. That's how this should work.. they want shares.. they should pay for them (and push the price up if they want them badly enough), as opposed to putting the company in a trading halt and giving them away at a discount. Supply and demand. What happens the next time someone else wants in .. do they get another CR? If we give away shares at a discount to the current price, the price isn't going to rise, is it? How is that fair?
If it turns out not to be not cash that we need now or in the very near future, I don't get why we would need to dilute the company in a never-ending quest for institutional investors, and resulting disadvantage against retail holders.
Having said that, I want us to take advantage of our first mover advantage and get lots of sales in many areas at high margin. We need fast, sustainable growth. If that means we have to pay for more bums on seats to commercialise the other areas that Bob has "on the shelf" then that's OK by me....... but why not state that at the AGM?
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