Ann: Appendix 3B, page-7

Hotfire

Do you understand what prophet4me was telling you?

An underwriter often passes some of their underwriting obligation to others - i.e. sub-underwriters.

Especially given the handsome fees received by Macquarie, they would probably be happy to de-risk by offering some of the shortfall shares to sub-underwriters and share with them some of their underwriting fees.

These sub-underwriters are often institutions that are already shareholders in the business - perhaps institutions who would have liked to get more RCR shares in the institutional shortfall book build, but missed out due to strong demand. Now, the can get to their desired holding level AND collect a small sub-underwriting fee as a bonus.

The reason I am writing this is to highlight that IFF this is the case (i.e. I do not know if or to what extent Macquarie might have used sub-underwriters), then some of the selling might have already been completed - i.e. existing RCR institutional shareholders who acted as sub-underwriters might have already sold some of their existing RCR shareholding in anticipation of the additional shares they are going to get from their sub-underwriting.

The bottom line is that you will still have selling pressure for a period of time from institutional and retail shareholders who might have ended up with a larger shareholding in RCR than they desire. However, some of that sell-off could already have occurred well before the entitlement or underwriting/sub-underwriting share have been issued.

I am still hopeful that once this selling pressure eases, RCR's share price might see a modest up-tick - and it could happen earlier than people might expect if Macquarie used existing RCR institutional shareholders as sub-underwriters.

However, all of this would be short-term technical stuff. What really matters in the medium to long-term is how RCR manages recent operational dislocation.

GLTAH DYOT