'Answer:The entity has announced a non-renounceableentitlement offer of up to $9.9m to existing shareholders. The entity has received letters of commitment to subscribe for $5mfromany potential shortfall from the offer. The entity expects that the offer will be fully subscribed'
If they had over 50% commitments from SHs then the offer would be effectively 'fully subscribed', as along with the $5m to cover any potential shortfall that would yield a minimum of 100% of the offer.
To use the words 'expects that the offer will be fully subscribed' would suggest that they have not got to 50% of current holders yet. Along with the extension of the offer I think this is probably the case.
If the shortfall $ are utilised to get to 100%, then there will be ongoing pressure on the SP until they are washed out of the system, which depending on the quantum of forced holdings may take some time.
At 1.1 cents that yields a 10% gain. plus of course their 6.6% fee for the cover note. They may even be happy to get out at 1c and just accept the fee as a worthwhile short term investment.
OSL Price at posting:
1.2¢ Sentiment: None Disclosure: Not Held
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