Ann: Successful $114m Institutional Placement, page-5

• Institutional placement to raise $114.0 million.
• Issue of approximately 28.5 million new shares, equivalent to approximately 15.0% of the Company’s current shares on issue of 190.3 million.
• Share Purchase Plan capped at $10m, offering all existing shareholders the opportunity to subscribe for up to $30,000 each in new shares at the Offer Price (the Company reserves the right to accept oversubscriptions subject to demand).
[source: ABB Cap Raise Presentation]

Hmmmn. How will this work? ABB has approximately 15,000 small shareholders (with 100,000 shares or less). If each one of these were to subscribe for $30K-worth of new shares under the SPP, applications would total $450mn, a tad in excess of the $10mn plan cap. In reality, of course, not all 15,000 shareholders will subscribe and not all subscribing shareholders will apply for anything close to $30K-worth of shares. Further, the company will (probably, as implied in the cap raise announcement) accept some degree of oversubscription. That said, even if only one-third of the aforementioned 15,000 shareholders contribute an average $5,000 apiece, that's $25mn in applications - two and a half times the $10mn cap. Why does the placement ($114mn) to institutions need to completely and utterly dwarf the SPP ($10mn)? As a small shareholder, you could be forgiven for feeling like an afterthought.