Seriously, what a bunch of knuckleheads... not the company... I'm talking about the people posting above in this chain! You clearly have absolutely no idea at all.
You guys would be the first to complain if the company did a placement at a discount to new shareholders, saying that they cut you out and you got diluted, etc. At least this way, every single shareholder has the right to participate. And in fact, they've gone one better, like they did last time, and they made the offer renounceable, so existing shareholders can sell their rights if they don't want to take it up. And other incoming investors can buy those rights.
You can be assured that the bulk of the money will come from new shareholders via the shortfall placement of rights that don't get taken up. But only after existing shareholders have received as much as they want.
This is actually the fairest way for any company to conduct a capital raising because it treats its existing shareholders fairly and gives them the same opportunity. More companies should do it this way.
But they absolutely do need to focus on marketing the business to new investors, both to complete this raising and to get more liquidity.
One of the problems with this company is that the 3 largest shareholders control 50% of the shares, and don't trade. So liquidity in the shares is quite low. With the large shareholders only taking up 50% of their rights, I suspect this is with an aim to get increased liquidity for other investors to enable more trading. This is probably a good idea. The other directors (Chris and Adrian) are taking up their full rights. Liquidity is a huge issue in this stock. Hard to buy anything meaningful as it pushes the price up quickly, and if you need to sell, you can't currently get out.
They do seem to be on the right track with the vehicle acquisition strategy... (and they probably should have got to that position faster). If you look at the last results announcement, the 2nd half of the year was much better than the first half, and the latest funding facility will only improve that. They need more funding facilities in place to scale this up. The CFO hire looks really good from that perspective. If they get a few more facilities in place then the next 6-12 months could look massively better. Funny thing with debt funding is that it is the earlier stage smaller amounts that are harder to get. Once they start getting to $10m+ funds required I think we will see much greater interest from a wider range of funders.
Let's hope we see a new investor presentation out shortly. That should mean they are out talking to new investors as well.
Cheers Marv
CL8 Price at posting:
3.8¢ Sentiment: Buy Disclosure: Held
(20min delay)