Good strategy. Would not be surprised to see this one already in...

Good strategy. Would not be surprised to see this one already in place....

I suspect the non-renouncebale rights issue was the only strategy available to the Board as they seem to have been caught by surprise that they actually had to make the interest payment this half......

Hypothetical conversation may have gone like this....

Debt holders : "Pay up, no more of this capitalised interest rubbish. $192 million is more than enough exposure for us".

JB: "We dont really have it, quick, what can we do to make the cash flow statement look positive"?

AJM non execs: "Maybe call Macquarie, they did PLS a solid"

Macquarie: "Sure, we can help, heck, we'll even underwrite it for you".

JB: " terrific, what are the terms"?

Macquarie: " accelerated placement to insto's at 5 cents per share, SPP for retail as well, we'll underwrite the shortfall at 4 cents, sound good? We all done here? Money will be in the ank next week".

JB: " hang on, that doesnt sound like a good deal, I think we just go with a dusty old non-renounceable rights issue. I'm an old school kinda guy, I like to keep things simple. Look, we'll even give the punters a little bit of a discount, they'll lap it up. No need for options this time either.... She'll be right mate".

AJM shareholders: "really? A non tradable rights issue with an insignificant discount? Gees, where's the incentive? Surely Macquarie could do better then this?"

JB to AJM Board: "actually guys, we need a bit more than cash than those sales last month gave us, anyone got a spare $2.8m, it would really help us out......."

AJM non exec: "what? again? And so soon. Get it together James, it's not that hard to manage expenses is it? Remind me again James why we didn't use Macquarie?

JB: " Macquarie said things that hurt my feelings, I used my outside voice and told them No."

AJM board: "So when does the cash come in"

JB: "Actually we hope it comes in soon, it would be really handy if it did. But if it doesn't, dont worry, because we gave ourselves an extra 3 months after the 1 month notification period to raise the extra bit we may need."

AJM non execs: " So let me get this straight, we're not using a bank, we are not underwritten, we gave shareholders an immaterial discount on a rights issue we're asking them to accept, and we are trying to close this over the Xmas/NY period and Chinese new year, about the same time that our $16 million interest payment on our $192 million debt is due and our commodity price continues to decline?"

JB: "Yep".

AJM non execs: "OK, makes sense. When's lunch?"