Good evening Grant, Alpha and others
The responses to my post of last evening have been noted (and respected).
I will only pick up on one point for now (and leave the ATC v TLO comparison as I don't agree with Grant's assessment). The main point weighing on the market (in my view) is the concern that most investors have about the dilutionary effects of capital raisings. I partially addressed a response to this previously, which I would like to expand on.
Put simply, in the days of the old mining company (NGH) working capital and exploration funds were financed through small capital raisings that kept the small admin teams funded (and the managers well feed). The perception is (rightly or wrongly) that this discipline has not been exorcised from the new look ATC. To date, I don't believe management have addressed this problem, or so I thought. But, new management has been looking at hybrid debt/ equity instruments amongst other tools to help bring about a more effective way of swallowing the FNT deal. To me it is clear. If the vendor (who is getting a big piece of ATC as part of the deal) could digest a cash payment mechanism tied to net cash flows from the combined ATC/ FNT operations then a deal is very likely to be mutually beneficial. Shares would be issued and held in escrow for 2 years, and rank pari pasu with ordinary shares. Add to this a convertible note with an agressive exercise price (in relation to today's share price) and ATC could suddenly be a world class telco with revenues in excess of $220m pa and earnings on a fully diluted basis of 9c per share. Can some one tell me what is wrong with that??
We'll talk later about declaring some one elses revenues (TLO) versus reporting real revenues of your own.
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