ODN (ASX) Ann: Share Sale Agreement with gridGomm

Originally posted by serena ↑

Let us put few numbers to stimulate our thoughts.

Current number of shares issued is 562 million

Expected consolidation share price as per ODN announcement is $0.100

Let us assume that the share price before consolidation is $0.020. In this case, the consolidation ratio would be 5 to 1 in order to achieve share price post consolidation at $0.100

Current number of shares issued after consolidation is 112 million (i.e. 562 million/5)
gridComm's owners will be issued 169 million shares post consolidation (excluding three tranches of 87.5 million performance shares which could be exercised within 5 years after satisfying performance criteria)

Based on the above scenario, the number of shares issued post consolidation is 281 million (excluding those performance shares).

CR for the amount of $4 million at $0.100 (consolidation price). The number of new shares to be issued to the applicants (if fully subscribed) is 40 million (i.e. 4 milliion/0.100).

Total number of shares issued after CR is 321 million (i.e., 281 million + 40 million)

The number of shares owned by gridComm (excluding performance shares) is 169 million. Estimated equity ownership of ex gridcomm's owners in ODN based on the consolidation ratio 5 to 1 = 169 million/321 million x 100% = 52.6 per cent.

If the consolidation ratio is less than 5 to 1, the equity ownership of ex gridComm's owners in ODN will be less than 52.6 per cent.

So what will be the consolidation ratio? Can the share price go up to $0.020 and above $0.020.

Existing shareholders in particular retail holders expect that the share price would go up beyond $0.020 therefore the consolidation ratio will be less than 5.

Can the interest of BOD, gridComm owners and retail investors be aligned when their playing fields differ from each other?

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Assuming the con ratio is 5:1 then existing SH of Odin are getting 47.4% plus $4m approx in cash of Gridcomm. Sensational deal for existing SH'ers of ODN.....think about it Alex could of stipulated a price of 20c a share therefore existing SH's get diluted to heavan and we have a controlling stake in the co. Further the Gridcomm founders and tech guru's have alot of skin in the game to develop the software further and sell more to end users. Personally I don't think it will be 5:1 but alot lower than that ie 2.5-2:1 once (SP of bw 4 & 5c) all gridcomm SH'ers sign and the investing world gets word of it!!!