1) It’s assumed HAV’s lawyers have reviewed and signed off on the Bergen transaction and were satisfied there was no contravention of any relevant laws e.g. Financial assistance provided by HAV for acquiring shares in HAV?
2) Market manipulation risk: This forum is all over this risk. What measures did HAV take to protect shareholders from this risk? E.g. Did HAV hedge its $1.6m ‘funding’ against the downside risk?
3) As HAV will receive higher or lower amounts for its shares, could it be argued HAV is trading in its own shares? Is this allowed?
HAV has effectively taken an opposite position to Bergen on 4.85m of its own shares. IMHO this is something another financial institution should do, not the Company itself. This deal doesn't make sense [if you’re NOT Bergen].
4) What collateral did HAV obtain from Bergen for its $1.6m ‘funding’?
Obviously we are outsiders, however, it’s difficult to see how the Bergen deal is in the best interests of the Company or its shareholders.
All I can come up with is that HAV’s Board and management, as insiders, are confident on the Wanbao/ Kalkaroo front? and the SP will rise accordingly and all will be forgiven.
But they have let the ‘fox into the henhouse’. Presumably, this has spooked shareholders and contributed to the sell-off since the announcement. It is certainly the most controversial of the week’s announcements evidenced by the level of discussion on this forum.
Now the good:
The flipside is that this has created a buying opportunity on the basis that HAV has been irrationally oversold.
What’s the worst that can happen? Debt-free HAV, with Cu-Co-Au-Fe-Mo resources in the ground with arguably an in-situ value of c. $1 billion, is placed in administration and sold in one-line or separately to the highest bidder/s.
As JM Keynes said: “The Market Can Remain Irrational Longer Than You Can Remain Solvent”
No doubt Bergen (and CPS) are awake to this.
DYOR
HAV Price at posting:
23.0¢ Sentiment: Buy Disclosure: Held
