FBR (ASX) Ann: Trading Halt

Originally posted by NoGtsNoGlry: ↑

Hi Ryzie

I like your posts and wanted to share my thoughts.

By firstly wanted to reiterate what Vegemite said today. Quoting Vegemite

Too many half empty glasses today.
Guys, no announcement yet in relation to what is brewing behind closed doors.
Let's stay positive.

The following is my opinion and how I arrive at that opinion, however I also acknowledge I could be wrong. But here is my take:

I raised the possibility of convertible note issue in the future in previous posts , however I think its too early and I can't see FBR placing an encumbrance on any assets in the Parent entity at this stage.

At the AGM, we were advised the Hadrian X is ready to build the display home but the Board is waiting til the new year. (Before anyone starts the criticism with this announcement again, just accept it for what it is. In other words, they are saying they are ready but its a bad time of the year to start now).

Reading the Sept Quarterly report, you will see there were about $16 million on cash assets as at 30/09/19, with projected expenditure of $8m to 31/12/19.

This means they will have $8m to get them to 31/03/20. I'm 100% confident they will not leave the cap raising to the last minute nor will they jump too early

With these bits of info, I can't understand from an outsider looking in, why they would need to move at such a pace to either raise share capital or raise debt in FBR before the new year when they intend to commence the display home build. Surely, the best time to do any type of capital raising would be around the display home build time (ie. early next year).

So I have discounted any type of share cap raise (ie. because of the above points as well as the use of the words other posters have identified "fundraising initiative").

So what's my guess? Perhaps a clue is something that Mike said in his presentation. Others can verify, but he inferred that both Hadrian X's were being heavily used and they could do with more X's right now.

My view is that either BKW or Weineberger is going to front the capital cost to build "unknown quantities" of Hadrian X's. I think the front runner would be BKW as the JV is in place and I suspect the contribution would be in the form of secured debt in FBR Aus (The JV entity).

I'd like to hope it would be Weineberger, but they haven't yet finalised the JV arrangement and I would have thought there would be something firmer before Weineberger is in the picture.

I decided to write this post, because as Vegemite points out, there is this immediate jump to look at things negatively. How about considering it could actually be a good thing (eg. no dilution, BKW moving to commercialisation etc).

We will find out in a couple of days anyway.

Expand

I agree with you mate, I would be very surprised if it's a capital raising. At the AGM, someone asked directly about a future capital raising and the answer given was that it would be needed down the line but not in the immediate future. They said they would look at various options including a share offer to shareholders or an institutional placement however I didn't get the sense that it was imminent.

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(20min delay)
Last 4.7¢		Change -0.011(19.0%)		Mkt cap ! $208.7M

Open	High	Low	Value	Volume
5.8¢	5.9¢	4.7¢	$1.362M	25.77M

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