Ann: Fully Underwritten Placement and Entitlement Offer, page-9

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arsenic

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03/03/17

14:48

Post #: 23080856
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Originally posted by VYR ↑

Hi Suz 73

The SP dropping below a fully underwritten rights offer does happen. Arrium were a classic example. They are one of my three really bad experiences.

Hopefully not the case here.

I can't imagine why management would want to issue capital at 18% of nett asset backing to repay debt that is convertible to equity at full asset backing.

Why they would also issue capital in excess of that to increase working capital when TIZIR has just started to deliver positive cash flow is beyond belief.

I guess they fear that if Eramet own more than 50% of the JV they will be become irrelevant. I for one see MDL already as an irrelevant middleman now that the development stage is complete.

We shareholders in effect own a shareholding in TIZIR and MDL is an expensive interference with MDL management showing us today that they appear to be only interested in having their lifestyle funded by shareholders capital rather than a small part of what they earn for us.

I'm hoping that this is the first chapter in a bigger story about Bond Refinancing and Ownership Rationalisation and that Management will redeem themselves with the final outcome.

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The simple answer is you don't run a business on net asset backing you run it on cash and cash flow. In the extreme if you don't have those you go Broke.

If you are an investor you may benefit from the SP moving towards net asset backing particularly if that Net Asset backing is correctly calculated.

MDL Price at posting: 48.0¢ Sentiment: Buy Disclosure: Held
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Ann: Fully Underwritten Placement and Entitlement Offer, page-9

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