BK - From where I stand I'd probably prefer to pay $1 for a DNK share once I knew that project debt had been secured with reasonable conditions than pay 88 cents for a DNK share now. Also if I participate in a cap raising that $1 would be going towards getting the project up and away.
As for whether the company will offer existing shareholders a chance to participate in the cap raising …
The company can issue new shares up to 25% of existing shares without getting prior shareholder approval. Currently there are about 264 millions shares so that would mean they could issue another 66 million shares that way. The prospectus indicates that they need to raise US$322m so say at 70 cents USD that would be A$460m, and they expect that it will be a 60 40 debt equity split so Danakali needs to raise about A$184m from equity. Danakali already has a cornerstone investor in Well Efficient with a 13% holding but I suspect they will use the 66 million new shares to bring in one or two more cornerstone investors.
So with the debt package signed and sealed and a couple of cornerstone investors in place (having raised sayA$80m from 66m shares at around A$1.20) the company may then call an EGM to get approval to issue another say 90m shares again at around A$1.20. Whilst much of that final tranche of newly issued shares will be marketed to institutions and sophisticated investors I reckon there is plenty of room for the company to run an entitlement offer for existing shareholders.
But then again I have not got much right since I started following Danakali so I may be way off on all of this as well.
DNK Price at posting:
88.0¢ Sentiment: Hold Disclosure: Held
(20min delay)