I've always felt that this was a backdoor cap raising.
Effectively MAY can now sell 23% of MEL to fund it's activities. As it stands they just picked up 23% of MEL for 4cps (4:1, MAY at 1.0cps) , and could sell those shares for around 5c atm (before any additional Vali ann.). So, instead of cap raising on market, likely for a significant discount (0.7 ish cps?), they have effectively sowed the seeds for a pseudo cap raise at 1.2cps+ (being the sale of the MEL shares at 5c ish). It's actually a super prudent move at this point; assuming they wanted to raise that quantum of cash (circa $5m). Assuming the BYE distribution goes ahead, they could also sell their portion of BYE shares for circa $1.2m, which is a much more liquid market than MEL.
Interesting times.
MEL Price at posting:
5.2¢ Sentiment: Buy Disclosure: Held
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