Fellow HC Posters,
At the risk of making myself more publically silly (one good thing about anonymity!!) I need some help to understand this (see below) placement to Alpha Investments.
To show my effort to understand, this is what I think this placement is about:
- Alpha allow access to $6M
- WMG can use it or not.
- If WMG ask to use it, we have to handover 3.5M shares.
- Alpha can't do anything with them (ie: sell them) as they are just held by them as 'collateral' against the ATM.
- However, Alpha can seek to buy the shares, and if they do it will be at a price set by WMG which would be 5% less to VWAP at a particular point in time (presumably time of sale).
I actually have no idea!..........any advice / help gratefully received.
EBRESOLUTION 8 – APPROVAL OF ISSUE OF COLLATERAL SHARES TO ALPHA
INVESTMENT PARTNERS PTY LTD
5.1 Background
On 15 July 2024 the Company announced to ASX that it had entered into a facility agreement
with Alpha Investment Partners Pty Ltd (ACN 648 623 223) (Alpha) (the Facility Agreement).
Under the Facility Agreement, Alpha agreed to provide the Company with an At-the-Market
Facility (ATM) of up to $6,000,000 of standby equity capital during the 48 month term of the
facility.
The Company retains full control of all major aspects of the placement process, having sole
discretion as to whether or not to utilise the ATM, the quantum of issued shares, and the
minimum issue price of shares for any placement. If the Company decides to utilise the ATM,
it may make a request to Alpha pursuant to the terms of the Facility Agreement and the
Company has sole discretion to set a floor price and the final issue price will be calculated as
the greater of that floor price and a 5% discount to the VWAP over a period of the Company’s
choosing. Alpha may (but is not obliged to) satisfy the Company’s request to subscribe for
Shares.
There are no requirements on the Company to utilise the ATM, and it may terminate the ATM
at any time without incurring termination costs, subject only to a notice period of not less than
5 business days. Alpha does not place any restrictions at any time on the Company raising
capital through other methods (to the extent it is not another ‘at-the-market’ equity facility or
other substantially similar arrangement).
The Facility Agreement requires that prior to making any request to utilise the ATM, the
Company must have first issued 3.5 million Shares, subject to obtaining Shareholder approval
for the purpose of Listing Rule 7.1 and for all other purposes, at no consideration to Alpha
(Collateral Shares). The Collateral Shares are being issued for the purpose of securing the
Company’s obligations under the Facility Agreement and may not be sold by Alpha other than
in accordance with the agreement. To the extent there are Collateral Shares outstanding on
expiry or termination of the Facility Agreement, Alpha will either pay an agreed price for the
Collateral Shares, or the Company will seek Shareholder approval to buy-back the Collateral
Shares for nil consideration.
