Good point. $1.46m cash left in the bank, and FAS have spent over that much just in chasing GWR thus far.
There is no way that $1.46m is going to cut it for the takeover costs, let alone all that "drilling" they are proposing to do in the next quarter.
FAS are stuck between a rock and a hard place now with an inability to fund costs associated with the takeover AND barely enough cash to cover exploration activities flagged even if the takeover was abandoned immediately.
By the way if FAS do not manage to arrange another underwriting or some other capital raising (hypothetically - there is no way they can raise debt) they will have to notify the market to that effect. Without a capability to pay the costs associated with the takeover (was it $40 million or so??) they would render themeselves insolvent should they actually gain 90% acceptances.
Under the Act FAS cannot continue to pursue this takeover unless it can arrange a new underwriting facility. (bear in mind Findlays are not going ahead with stage 2, and are disputing stage 1) To pursue the takeover without the ability to pay for the resulting costs is akin to trading knowingly whilst insolvent - which exposes the directors of FAS to liabilities associated with this action.
I imagine any auditor/legal/corporate advisor worth their salt would be warning FAS of this right now. Oops I forgot, FAS are now in a dispute with Findlays, their corporate advisors.
I think FAS have bigger things to worry about now than the EGM.
GWR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
