Ann: Trading Halt, page-133

Hi Youngie
Often when small companies want to raise funds brokers do it by way of a placement to 'Sophisticated' investors - unless you are registered as a 'Sophisticated' investor with the brokers you will not be sent the offer and will not be able to participate (I am not a 'Soph' - not rich enough , so I don't receive these placement offers).

Of course, a placement to 'Sophs' can also be supplemented by an entitlement offer (or share purchase plan) to existing holders.

So typically, the Sophs receive details of the offer, the offer is finalized based on subscriptions received and then there is an announcement to the market with the placement details (amount raised and price). This announcement will also include details of any complementary entitlement offer or share purchase plan being made to existing holders.

This system can lead to angst when existing holders are excluded (placement to soph's only) although personally I favour placements (albeit I can't participate) as they are efficient and quick (SPP's in particular can be a real pain as they can take weeks to finalize and if you are scaled back it can tie up your funds for weeks before you get a refund).

GLTA & DYOR