Interesting that the agreement between GEM and CIPI was called a binding Term Sheet - yet when CIPI decide not to take up the full 2nd tranche there seem to be limited consequences (for CIPI), apart from the selling down of Tranche 1 if they default on the amended subscription total.
According to the "binding" agreement CIPI was to subscribe for an additional 38M shares @ $3.88. After some negotiations they agree that CIPI only need to subscribe for 8.2M shares @ $3.88. CIPI have through this action avoided an immediate capital loss of around $12.9M or so - based on the share price prior to the suspension ($3.88 minus $3.45 times the ~30M shares they will now not take up). Wonder if CIPI will be able to buy shares on the open market (at lower prices) with the $117M which they will now not need to hand over to GEM (@$3.88)?
Existing shareholders will now wear the impact of the replacement-placement which will be carried out at $3.10 to $3.20.
Have I misunderstood the term "binding"? I would love to do business with companies like GEM where you can simply walk away from your commitments (with minimal consequences) when things do not play out in your favour.
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Open | High | Low | Value | Volume |
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1 | 2500 | 1.315 |
3 | 4016 | 1.310 |
3 | 4432 | 1.305 |
6 | 19956 | 1.300 |
Price($) | Vol. | No. |
---|---|---|
1.340 | 2500 | 1 |
1.345 | 2500 | 1 |
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