Of course we already know that there is an intended capital raising of some sort through the Trading Halt announcement.
Suddenly there is a rumour of an impending right issue announcement of something like 1 for 2 shares priced at 7.5 cents out of the blue.
Just so the concerned CTP shareholders on HC can get some sleep at night I thought it might be worthwhile to calm the scene down a bit, especially with that rumour!
As far as I am concerned there is no use to speculating what the nature of the fund-raising is about, but IMO there is NO way that CTP would consider a rights issue of the magnitude of that described above for a couple of reasons:
1. CTP have no immediate requirement for cash, whether BG is there or not, as JH has already outlined the 2010 funding requirements and CTP are well funded currently, as well as the rolling bonds to trickle funds in.
2. A rights issue will take a number of months to be put in place and unless underwritten (and this based on rumoured issue means 22.5 million underwritten) will be an unlikely outcome by any underwriter in the current market (for a company with a market cap of only 60 odd million).
3. Currently CTP is on the verge of commencing its conventional oil/gas exploration program, and this scenario would lead to likely increase in CTP share price which could even bring in the CTPOA options before expiry this year. Why would they now decide to completely do away with that possibility.
IMO the CTP board is careful and conservative with its funding requirements, but having already endured the pain of the previous rights issue last year there is NO WAY they would be foolish to repeat the process again in the midst of the 2010 exploration campaign just as things are getting hot, especially with oil price moving up!
This impending funding must be related to a third party offering a very attractive (from price perspective) outcome for CTP, otherwise they would not consider it. I presume the party concerned may well be a signficant new entry into the whole scene!
Time will tell...
CTP Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
