Well I wasn't going to participate or buy on market but have decided I will now take my allocation and go for slight oversubscription.
One of the things that has changed my mind on this is this statement from the HY report:
“The Company continues to divest poor performing stock categories and reduce its overall
stock levels, which will further assist the Company’s working capital position.”
Then combine that with this from the business update on the 16th of March:
Comparable sales for the three week period between 24 February to 15 March 2020
were +15.1%. This was driven by strong category performances in cleaning,
groceries, toiletries and pet care.
Allensford at 19%, Grahger at 13.6% and Andre Reich at 1.41% have all committed to taking their full allocation, ORD doesn't appear to have backed out of underwriting at this stage and it is likely that's related to it being sub-underwritten anyway, likely one if not both of those major holder being amongst the sub-underwriters IMO, specifically Grahger who can increase to 19.9% before needing to push for full offer, Allensford can only move another .9% so I would imagine that's exactly where they'll aim.
Grahger had been buying much much higher and will likely get every share available to them through this process, surely be at least a decent portion of people not taking up the offer under the current conditions so wouldn't be at all surprised if Grahger made it their full potential of 19.9% also.
Lots of conjecture but likely going to be a tighter share register than before which is rare under a capital raising scenario, with the sales boom at the moment this also gives a chance to sneak a few store closures in a little more aggressively than previously planned, stock levels likely well down now, cash position likely largely improved and quite likely the raising will get full funding amount.
We also have the bank funding renegotiated already, not in any sort of trouble in that regard, IMO the major question that will likely come out of the next few weeks is will either or both of the major holder make a tilt at the company?
We'll see how my thesis plays out, I'm comfortable enough to squeeze out some more dollars to put in the market when I really probably shouldn't have
