They dumped through 1.2 finally, to drive us down to a new 52 week low....1.1...certainly not pretty, and on a green day on the ASX, which is really hard to stomach.
Whinge over....
Back to the GM, and its resolutions, and after reading @jake0002 response, I thought I would chime in again, and I mean no disrespect.
You are certainly entitled to your opinion,and these minutiae of thoughts is what makes these public forums great...
This CR, was to issue 423,076,923 shares at 1.3c to raise AU$5.5M
To quote the announcement- The Board of Ionic Rare Earths Limited (ASX: IXR) (“IonicRE” or “the Company”) announces it has received firm commitments to raise $5.5 million (before costs) by way of a share placement of approximately 423 million shares at $0.013 per share (“Placement”)
The shares are made up of 2 parcels
SUBJECT TO SHAREHOLDER APPROVAL
Sophisticated investors 384,615,384 B.Lynch 38,461,539 Total 423,076,923 at 1.3c
Todays closing price 1.1c.......
I haven't seen the current accounts, but I would hazard a guess that this money has not been received, because the shares have NOT been placed yet, because we have not yet voted on the the ratification of resolution 1 and resolution 6. ASX Listing Rule 7.4 provides that an issue of, or agreement to issue, securities made without approval under Listing Rule 7.1 is treated as having been made with approval for the purpose of Listing Rule 7.1 if: the issue or agreement did not breach Listing Rule 7.1(15%) and the holders of the entity’s ordinary securities subsequently approve the issue. To comply with the first requirement above, the issue must have come within the entity’s placement capacity under Listing Rules 7.1 and (if applicable) 7.1A at the time it was made or agreed to be made. It is not possible to ratify under Listing Rule 7.4 an issue of, or agreement to issue, securities that exceeded an entity’s placement capacities under those rules.
It is illegal under ASX rule 7.4 to place them without ratification.....so how can we have been paid? They have received a COMMITMENT that they would be bought and nothing else at this point. If the deal falls through, these securities will lapse after 3 months.
As a general rule, everyone despises dilution, or the watering down of your investment. Investors hate it and so do for the most part, companies issuing the stock. They would far rather be in a position to buy stock back and minimise the dilution, as well as help bolster the SP, and keep shorters at bay.
And yes,the company has issued the shares, but only on the commitment from the sophs, and essentially to keep the company afloat, and progressing their projects.
Remember the last quarterly...0.4 quarters left of cash available without the raise.
In my view, thats a fairly dire situation to be in, and you would either have to raise by debt, or raise by equity....equity being the lesser of 2 evils in this high interest environment. The way the markets are at the moment, with the lack of liquidity, RE prices in a slump and high interest rates, there is no way anyone would be keen to raise capital at the moment, unless they absolutely had to.. And there's no way Tim would have done this voluntarily...he HAD to....plain and simple.
The raise we had to have....has a real Paul Keating vibe to it....
I reckon we are close to big things happening, and to have this taken away from you, to have it snuffed out just when you are on the cusp of the dominos falling....well, I reckon there's no way Tim will let that happen, this is his baby after all. I certainly wouldn't, and if I had to have the ugly raise that you must have to survive, then so be it...take the hit and move on...and then deliver...deliver big, because I really don't know if there's any going back to the well. 3rd raise in 7 months....yikes!!! This is the point when the sophs no longer meet with you, or take your calls, or even speak to you.....dire straits....so you HAVE to deliver.
As for an SPP, if I am not mistaken, you had an opportunity to participate, last November...which was extended to December 2023.
The IXR believers would have supported and invested, and as per ASIC Instrument 2019/547shareholders can only contribute 30K in any 12 month period...so they have probably already contributed and are probably tapped. So, I would say the book-runners would have mandated this and ruled it out with this raise. Hence why SPP's are generally only run once in a 12 month period. They can be long and a little messy and be considered a secondary market to raise capital....and are handy to keep up your sleeve when primary markets are tough. And the book-runners like to keep it short, tight and sweet...none of this drawn out stuff because of retail is procrastinating...
As for the discount to the VWAP and the options, in this market, if you do not sweeten the deal, you simply won't get one. With the terms, the book-runners will balance options with VWAP and come to a balance between the two. More discount less options, less discount, more options. The sophs need to feel like they have won, because if they don't, they wont invest...
And I still don't see the options as a great sweetner. If they were 0.5c, yep, golden. But 2c with a 4 year runway....great runway, if you are still around. We are obviously believers, and that's why we are here, so for some of you they will look attractive
But the risk to capital for these guys, when preservation of capital is No.1, is high with IXR...particularly when these guys could probably find a secure bond paying 5-6%or more at the moment...
Who gets screwed? Well, we do... Negotiating from a position of weakness is never ideal, and the sophs would take one look at our books and start salivating at the deal they know they can crunch here...and we really have no choice but to bend over...
I ask you, if we didn't take the deal, what were our options? Debt? Pray for government funding? SPP? Takeover, or minority partnership?
And as for Mr. Lynch, you asked- yep - so what? If Mr Lynch was prepared to pay 1.5c (I think) for shares when he joined IXR, why would he not pay same or more now?? IXR operations are far more advanced now, than they were back when he joined.
Because today he could have bought them for 1.1c...
IXR Price at posting:
1.1¢ Sentiment: Buy Disclosure: Held
(20min delay)