Obviously the pricing would depend on the story going with the CR. If the story was good enough, a CR could in theory be priced higher than current price! If the story is really bad enough, then it's unsaleable at any price.
My own guess is that the story will be:
- we blew it on Quindell acquisition and are writing off say 1/2 the value, and performance of this unit won't be nearly as good as we thought
- banks require us to pay back 1/2 their debt to reduce their risk exposure
- but we still have a strong franchise in Australia and expect cash flows more or less as previously advertised
- offer opportunity equally to all shareholders
- it's non-underwritten renounceable rights (this means shareholders can sell their rights rather than exercise them)
- set at price where it will be fully subscribed almost certain - with expectation and advice that it would almost certain trade higher than whatever price set
- my guess 10-20c, because to set any higher risks raising might fail
Others sure to disagree on pricing - because everyone has own view how good or bad the story.
SGH Price at posting:
65.5¢ Sentiment: Sell Disclosure: Not Held
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