Yep there is dilution. There will be another 28m shares given to the scientists and 10m 50c oppies to the directors.
This is plain and simply the 38m that Solamind held pre-Opes collapse.
At least they didnt issue shares for nil consideration to the directors.. they get $5m out of them upon conversion.
Thought: I wonder whether Solamind may sign their rights to any claim over to Solagran, so that any proceeds gained from a settlement with ANZ will be used by Solagran to buy back shares on-market.
That way the Solamind holding will be restored (at least partially), to its pre-Opes collapse levels, albeit in a different form (ie Solalife).
The scientists dont want dilution. They want their stake in the company back. Hence the possibility of an on market buyback in the future.
So nothing wrong with that.
Howdy Brabus
As for the rights issue. Well I would imagine this would be wrapped up well before Christmas. They have announced that the first stages of the Tomsk plant upgrade will take place before the end of the year. For that they need $$. You make the point about the revenues. We have no idea what they payment terms will be like from the hospitals and we could very well be on 3-4 month payment terms. So even if Solagran were to sell Ropren tomorrow it would be Jan-Feb 2009 before the proceeds would hit the bank account.
Yes its more shares. No one is disputing this. But if it means they can do things today instead of tomorrow (or in December instead of Feb next year), then there is nothing wrong with it.
Hey - at least its not range issuing 100m shares for $5m!
Solagran have said they see around 300m fully diluted as the ultimate # of SOI. Following the news today it will be around 260m.
Cheers
SLA Price at posting:
26.2¢ Sentiment: None Disclosure: Held
