Ann: Tranche 1 completes, Notice of Meeting and SPP to open, page-3

Au contraire, mon ami.

An issue of new capital in the secondary market is priced at a discount to 30-day VWAP and/or spot to ensure that investors enjoy a privileged entry point for undeployed, high risk capital. For a large, established company that is usually a single digit discount: for a highly speculative, unproven company that may be a 25 - 30% discount. SBM is probably somewhere in between, although the board has to recover a heavily tarnished reputation. The rookie error by the lead manager of this issue is (a) there is clearly little or no after-market Institutional buying and (b) there is no easy access to historical, independent research to provide some confidence for new buyers. Looking at the issuer and lead manager websites provides little clue as to the prospects of this company. The lead manager got their fee, the issuer got their capital, the investor is wearing the pain.

Only God knows why the so-called Institutions bought this particular issue. It would appear to be purely thematic and investors clearly got their full requirement and more because it opened at issue price after the lifting of the trading halt and has only traded lower since. That is a text book example of how not to successfully issue and manage a capital raising. The share price is now a 35% discount to spot price and a 21% discount to issue price pre-raising, and the market is awash with loose shares. The one saving grace is that the SPP @38c should be ignored and Retail can now accumulate on-market as the 'buyers of last resort' at a better price.