cf's new cash offer for dml, page-19

The equity requirement is obviously not for development or expansion but rather because the company has solvency issues. What the banks will now require is that DML provides them with certainty or they will perfect their security. This isn't simply a shareholder decision anymore. Clearly the board' s decision making has been suspect. Or has it? Maybe they knew that a smart investor if given the opportunity to do DD will discover what poor retail investors can't see and understand. Or were they simply naive to believe that the DFS cash flow model (at 5% discount rate) will be realised?

The only way to achieve certainty is an underwritten rights offer. I'm sure the underwriters will also require a DD (there may still be cowboy hedge funds that will do this sight unseen). So DML may as well lift it skirt to potential underwriters including Cathay - whats the harm of this, DML isn't a biotech or IT company. They can then allow a firm take over bid, if accepted, to trump an underwritten rights offer. With this certainty the banks will given DML the necessary breathing space.