Ann: Results of FAR Limited's $15 million Entitlement Offer, page-29

Hi Ropoh

Yes it would seem that clause 1.6 (g) could already be used by the underwriters as an exit trigger if they wish, also 1.6 (d) (ii) for which the oil price is now close could turn into another avenue. However, in their recent announcement FAR again indicated that the entitlement issue is fully underwritten and one could be forgiven perhaps for thinking that the underwriters are still intending to support the issue.

However, I also note the following from the offer document booklet:

"Under the Offer Management Agreement, FAR has agreed to indemnity (?sic) the Joint Lead Managers (and their respective related bodies corporate and representatives) against any losses they may suffer in connection with the Entitlement Offer"

Not sure about how such losses might be calculated, and I doubt whether any of this is material to the share price, but could this theoretically mean that if they choose to continue to underwrite the issue and then flog them off cheap and incur such loss, then FAR will have to compensate them for it?

pj