Ann: Strategic Partnership and potential ECF rights issue, page-7

I am not really clear how this works

• Lederer Group acquires an additional 12.6% of ECF or 39.9m shares at say 60cpu = $23.93m (just noticed becoming a substantial holder - spent $25.3m)
• ECF wants to reduce debt to the lower end of guidance, from 39.9% to 30%
• Drawn Balance Sheet debt is $195.2m so assets must be $488m
• 30% of $488m = $146.4m
• Need $48.6m to pay down the debt
• Plus ECF want money for capex say $10m
• $5m to run the cap raise
• Distribution guidance of 7.5cpu x 164m new shares = $12.3m additional div payments NOT POSSIBLE I am sure would not be eligible for the December payment which would halve the additional div payment for this year to $6.2m)
• Need to raise $74m at 45cpu = 164m new shares
• 316.6m shares currently
• 1 new share for every 2 current shares

TOT had a 0.8 for 1 cap raise recently with a 50% take up, offer was at a 25% DISCOUNT

• 50% take up raises (at 45cpu) $36.9m
• If Lederer takes up their entitlement of 20m at 45cpu = $9.0m
• Leaves 164m - 82m - 20m = 62m shares for underwriter Lederer = $27.9m
• So Lederer would have spent $36.9m of their further proposed $50m spend. How would they spend their remaining $17.1m?
• Lederer would own 121.9m shares of 480.6m shares or 25.4% for $60.8m
• 25.4% of the net assets of $264m = $67.1m

If a cap raise is conducted and made available to all holders it is not so good for us as share price would probably drop to 45c

I suspect the extra shares will be only offered to Lederer and 2 other holders who own $10m or more.

There appear to be no good options here - sell one or more properties or a cap raise?