BLG were always going to raise capital. A rights issue is the fairest form of capital raising.
It means BLG are raising money from existing shareholders.rather than the market who might just be trading the shares because of a raising discount. Everyone gets a pro-rata chance to participate.
The rights are not tradable, but the shares are. You can take up your full rights or sell some and pay for your remaining rights, or take the dilution.
If you don't participate, you will be diluted to the extent of the take up. The discount and ratio would be targeting maximum encouragement to participate.
BLG would be moving now to ensure they can get capital before it (potentially) dries up in the period ahead. A well funded BLG will be able to continue their commercialisation during the CV-19 outbreak. I would imagine they had been holding off for some good news later in the year, but now see it essential to pull the trigger on the capital raising.
Doubling my holding (i.e. maintaining my holding) @ 2cents a pop is only 10% of what the shares were worth a little over a year ago. I invest in the company, not trade the company, so I will be taking up my rights.
BLG Price at posting:
2.2¢ Sentiment: Buy Disclosure: Held
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