I think there are some posters and the market have become very emotional, and not looking at BRL objectively... either at the time these documents were signed, or 'today'.
Firstly, you have got to look at when the deal was signed. BRL's share price was at rock bottom (before rumors and a coal price turn around etc) and it was obvious BRL were running out of cash and on the brink of bankruptcy (as the CEO recently said at the presentation lol). Managers and the baord, eg the CEO, themselves weren't being paid lavish amounts (in contrast to Solid Energy lol) and alot of the fund managers had been hurt just as badly as the retail holders. Looking at things mid last year, things were fairly direr and this was reflected in the share price. It did not help that Solid Energy basically wanted cash up front... no rights issue, even if fully underwritten, and no bank funding that could (potentially) have been pulled... there was only one way BRL could get this over the line, and that is the way it has been done. People could have, like me, decided to jump in and by shares at 3 cents around the time of the announcement.
Had coal prices not rebounded, BRL's shares would probably still be much higher than 1.2c it was a year ish ago, but no where near 13 cents it finished on Friday, maybe around 3 cents... and I can almost guarantee nobody would be commenting "how bad this deal was" and bringing up corruption and the FMA etc and other various comments taken only in emotional or irrelevant context, if that was the case. Just because some insto's and managers backed themselves, while other retail holders weren't so sure is no excuse to get emotional and angry, and hence I am surprised, although on reasonably low volume, the share price has slid so much - the next few weeks I would not be surprised to see a large rebound to 20 cents, especially in the run up to quarterly report in a months time.
So back to the point: These insto's backed BRL when it could very well have gone bust a few months later. I remember BRL did a share issue at 6 cents or so a few years back and they received only a couple thousand from shareholders (ie not much at all!), including from myself. There were far less shares issued than ever today, and still the share price is much higher than that 6 cent price (which now looks to be a bargain!, but 3ish years ago it only went from bad to worse).
Also, I would have been more concerned if Management had not taken up any rights, as this shows they too had little/no confidence in BRL's prospects.
So lets take a chill pill at BRL objectively today and not get angry at management and instos for backing BRL when nobody else could reasonably could have been able to given the circumstances of the sale - the deal is done, move on:
1. There will be 1.88b shares on issue
2. Met coal prices are above $200 (33% higher than their 'forecast' in the update)
3. BRL are making money and huge cash flows
4. They will probably pay a at least 1 cent dividend this time next year (cost $18.8m)
5. Probably best not to piss of the instos, whether or not they have more shares: Those insto's will be putting in the good word and potentially help BRL out ALOT (new customers, new shareholders, new ideas)
6. The instos that brought aren't emotional quick buck retail shareholders and won't be stupid and start dumping shares at discount prices... they'll be hanging out for the high yield (even at 13 cents) and the benefits of higher than 'forecast' coal prices, rather than a fire sale... like some emotional (or uninformed) people are thinking on here.
It may not sound fair, and don't get me wrong I'm not that happy myself, but retail shareholders were given years to back BRL in the 1 - 4 cent range, and I did because I was objective - it may be annoying we didn't get a bigger slice of the action and at the end of the day there will always be posters who want to rain on BRL's new found parade, unfortunately for them, the outlook is very bright and this is really just the beginning of a new era.
As always, DYOR (and note this post wasn't directed at anyone in particular).
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