I have thought long and hard about this. Here are my various outcomes.
1. Deal gets rejected and the creditors apply for liquidation. Then the USA assets are lost. Shareholders lose.
2. Deal gets rejected and the Azarga loan gets converted. Azarga ends up bidding for BLR at a market related multiple, around ,4 in Azarga equity. Then Araga sells to WEstern Uramium whatever it is WU wants. BLR shareholders lose here but there is nothing they could do to stop it.
3. BLR shareholders reject the WU offer, but WU ends up with over 50%. WU strips out whatever asset they want and leaves the remains shell listed. Once WU gets what it wants, WU bids at a price for the shell just above the trading price, which I would imagine to be ,1. If BLR lived that long. there is a reason WU is giving BLR a short term loan. If the BLR shareholders vote against the deal, how long do you think BLR will have before that loan from WU is required to be repaid? What do you think BLR will put up for security for that loan? BLR shareholder lose here.
4. Shareholders of BLR vote against the deal. A deep discounted rights issue is done at ,1. Assuming $1 million raise is done, this is 1 billion shares before costs. This is a 33% dilution for current shareholders. I think the rights issue would not be 100% subscribed because people will think they are throwing good money after bad. So maybe only $500,000 is raised. BLR will eat through this amount in 9 months. Then another capital raise would be required. BLR shareholders lose. In the meanwhile, WU had gone into production and is one of the few producers of U.
5. BLR shareholders wake up and realise the WU is a great offer either an experienced CEO. WU goes into production and the share price rockets.
I missed 2 other outcomes and they were similar to points 1 to 4. But I forgot what they were.
Cait
BLR Price at posting:
0.3¢ Sentiment: Sell Disclosure: Not Held
