I am not sure you are reading that correctly.My take is that the...

I am not sure you are reading that correctly.

My take is that the entitlement offer was a dud, with less than half the new shares on offer taken up: 600m new shares were created, 275m were sold, and the underwriters got lumbered with 325m of them.

The hedge fund Regal Funds Management has come in and bought about 273m shares at 2c each - well below market price. Those shares can only have come from the underwriters. So the underwriter paid 2.5c for each of 273m shares, sold them for 2.0c, making a loss of $1,365,000 on the shares, and more than wiping out their fee of $1,050,000. Oh dear. As I said previously, JT played a blinder here, and Shaw and Partners must be licking their wounds. Mind you, they presumably still hold 52m shares worth $1.3m, so it is not quite a bust for them. Not yet, anyway.

Looking at the recent history of Regal, I am not sure if their presence as a major holder would be welcomed or not. They must have a plan to make money from that holding, but whether it will be to the benefit of existing holders, or at their expense, remains to be seen. They now hold nearly as much voting stock as JT, so they could probably do something hostile if they wanted to.