I don't agree they have to raise money first to give to the directors to buy shares. They just allocate the shares on the basis that a loan liability is created based on SP at issue. e.g. if they gave them the shares now at 31c, then a loan of $11.625m is what the directors would have to pay back to the Co at some future point (i.e. on sale or take-over).
As it's a limited recourse borrowing the directors are protected in case the SP goes below the issue price, i.e. they only repay the loan on the basis that the SP is above 31c when their shares are sold or acquired. The directors therefore only profit if the SP goes above the issue price which, along with paying back the loan (of say $11.625m) to the Co, is in everyone's interests, especially us regular shareholders.
I would imagine this will be done first week of December and a placement (to meet $15m provision) will be done in the 3 months thereafter before 28/02/13.
All good IMO.
EIO Price at posting:
31.0¢ Sentiment: Buy Disclosure: Held
