Oh me ... oh my.
Frankly, in my view, this '
communication' fails to adequately address the reasonable points / complaints made by many posters today. It reads to me as a mere plea for holders to '
cross their fingers' and '
trust us'. Some might I suppose. However, others are entitled to ask questions as QBL is a publicly listed company and this is an open discussion forum.
In my view, this sentence seeks to '
wash away' the content and import of the announcements released today.
"
[T]he company understands that people will blow off steam for a while, but there is a back story and that will be seen in the coming days ahead." Are we entitled to declare terms like, "
blowing off steam"?
"
A back story"? Seriously! What is a back story?
So ... there's more to come (...
will be seen in the coming days ahead.). In my opinion, a version of the, '
but wait there's more' cliche!
And this, "...
blow off steam"?? No ... '
blow off steam' is what one might do when one's football team loses a game or, the red light at the intersection comes on sooner than anticipated.
It might be an opportune time to remember that many people have used their hard earned dollars (family money in some cases) and 'invested' in a public company. Then, within the space of 6 or so weeks, the board of the company reduces a
cap raise from 0.08c to 0.035 (i.e. less than half). A cap raise that was included in a "
company transformation announcement"! Then those 'plans' are dismissed with a very vague "...
market conditions" rationale. And then the company rep labels posters concerns as, "
blow off steam"? - without any acknowledgement whatsoever - as to why some might "
blow off steam"?
The fact is, posters are fully entitled to raise questions around these issues. What on earth did QBL expect holders to do? Well ... apart from merely "
blow off steam" apparently!
"...
and the management has a well laid out plan." I wonder why this, "
well laid out plan" was not included in the 131 page company transformation announcements of June 2018 or, for that matter, in the announcements made today. I disagree on the "
plan" claim. I can find little evidence that there is a "
well laid out plan". If, I am wrong, then simply point me to where we can all find these "
well laid out plan".
Fact is, one of QBL's most recent "
well laid out plans" was to raise funds at 0.08c. Well ... with the announcement today that the new cap raise will be at 0.035c - the plan to raise at 0.08c is now in complete tatters - is it not?
And why are, "...
well laid out plans" and "...
back stories" always just over the horizon i.e. yet to be announced?
The "
Recompliance Update" Announcement.
The Capital Raising
"...
the Board of Queensland Bauxite Limited (ASX: QBL or “the Company”) has recognised that due to current market conditions, the intended capital raise at 8c is no longer an immediate practical option. As a result, the Board has decided to amend the raising price for the recompliance." (my bold)
Well ... going by posts on HC ... the 0.08c cap raise was never an option. It seemed obvious to a number of HC posters on or, after 20 June 2018 (date of release of Company Transformation Announcement).
I would like to know what criteria the QBL board used to set a capital raising price at $0.08 when the market price, at all material times since June 20, was well below this price?
"
No longer and immediate practical option".
Many on HC have argued, and with some cogency and as the facts now demonstrate, that
it never was an option. Why could the QBL board not see this?
And, is the QBL board able to distinguish, for their shareholders, how the, "...
current market conditions" differ so significantly from the prevailing market conditions as at 20 June 2018, that they now need to
cut the proposed cap raise by more 50%?
Given the fact that the proposed capital raising has now been reduced by more 50% how can the shareholders be expected to maintain their confidence in the ability of the board to deliver increased value for their shareholders?
The case for an independent board chair is now established - in my opinion.
And, I have not found anywhere in the "
Recompliance Update" where it is noted that the
board members intend to take up their full entitlements in the capital raising! Maybe I missed it?
So ... I also think that the shareholders are entitled to ask,
will the board members and other company officers take up their full entitlements under the proposed capital raising?
And this paragraph deserves scrutiny - in my opinion.
"
The Company has been informed by the ASX, that the ASX current policy for any company undergoing a recompliance, that if the price of the recompliance capital raise is amended from that which was announced in the Annexure A transformation announcement, that given the repricing there will be significant changes to the capital structure of the Company and metrics of the recompliance for which the market will not be fully informed which necessitates that the relevant Company’s shares will be suspended from trading until the recompliance is complete. Due to the current market conditions, the Board has had no option but to change the raising price."
So ... are we to conclude, on the basis of the above, that the market is now being asked to accept;
(a) that the board had no contingency plan around how a change in the capital raising price ("
if the price of the recompliance capital raise is amended from that which was announced") and,
(b) the effect on disclosure ("
for which the market will not be fully informed") and,
(c) the capital structure of the company ("
that given the repricing there will be significant changes to the capital structure of the Company")?
All of this has occurred at a time when the market price of QBL shares (i.e.
post the June 20 announcement) was far below that of the the proposed capital raise at 0.08c! Staggering.
Is that the message of this paragraph?
I would hope for a long suspension for holders. In my opinion, I believe that if QBL was re-listed today - it might have been smashed down to well below the 0.035 cap raise. Just my feeling though - price picking in the spec end of town is all voodoo - I think.
The quarterly report might also offer further insights. I might have a look at that tonight.
