Hi Rob, I guess it’s a way of paying down the debt or converting Morgan’s debt to equity as they had previously flagged. Maybe a rights issue was the easiest way of doing it as it likely avoids the need for shareholder approval given it’s a pro rata offer. Likely any other way would require shareholder approval as it involves a placement to Director, whereas rights issues are exempt. That’s how it would work on ASX, not sure if that’s a general Corporations act requirement though.
So not sure if they are expecting anyone else to participate given the lack of liquidity in the stock but I guess we get massively diluted if we don’t. Just a pity the debt couldn’t get paid down from those hoped for gold revenues eh, perhaps they should also look at buying everyone’s shares at 27c so they own 100%, they’d get mine. Perhaps if they get to 90% they can compulsory aquire the rest.
I will sit down and work out that percentage one day.
HAO Price at posting:
23.0¢ Sentiment: None Disclosure: Held
