Based on entitlement offer egn after capital raising will have 1,241.7 million shares, at the current market price of 12.5 cents market equity is 155.2 million. The pro forma eqty page 11 is 175.2 million which is equal to a share price of about 14 cents. Based on FY 2011 EBITDA 29.7 m share price is reasonable. To pay a dividend of 1 cent per share will take 12.4 million. Cant see any dividend this year on net profit of 5.8 m.To raise the share price the management and directors have to earn more bucks. The majority of shareholders will be loosing money so therewill be a lot of price resistance with shareholders selling as SP rises. For me the company has been a real dog. All very gloomy,however I will hold for a couple of years in the hope that the Company will come good.
EGN Price at posting:
$1.30 Sentiment: Hold Disclosure: Held
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