Thanks cheekyjcer, that’s more or less my understanding too. The main point being the number of shares to be issued is fixed at 59 million plus the 5.9 million shares issues as a ‘value payment’ in lieu of cash. It is my understanding that these were ‘issued’ at 7.65 cents and cash received.
AKK then entered an equity swap agreement, obviously a condition of the subscription of 59 million @ 7.65 cents. The cornerstone ann. from 3rd December says the swap enables AKK to ‘secure much of the potential upside arising from anticipated near term news flow’ ...I assume that meant an increasing SP and thus extra funds under the swap arrangement.....
The swap agreements have a benchmark price of 10.2 cents and we hand back (59 000 000/6) x ($0.102 –SP) every month. I assume the SP is the lowest achieved for the given month..The very low SP is costing us money not equity.
I don’t think Lanstead will want the SP significantly below their average cost per share. That could bring about a low ball TO offer, possibly resulting in them making a small loss. Unless they are in bed with someone who is going to make the low ball offer...with 20% they will have a lot of the say..I think they will want it low until July but after that it is anyone’s guess.
AKK Price at posting:
3.5¢ Sentiment: Hold Disclosure: Held
