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News: RRP Realm Resources updates on suspension of trading in Realm shares, page-44

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152 Posts.

3

31/01/17

20:28

Post #: 22266317
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Originally posted by Maysgr ↑

Re vending agreement. Taurus purchased the mine and then effectively sold it to RRP in return for 87.8% of the shares in RRP.
This is done for liquidity. It is much easier to sell shares in a company, as opposed to trying to sell a mine (should they need to raise funds). Taurus also do not have to manage the mine.
Taurus are in the same situation as us, their money is tied to the share price.

I can understand why the ASX see this as a back door listing. Given we made bugger all revenue per quarter prior to the acquisition to now be in control of a large, producing coal project bringing in big $.

The ASX are just enforcing their rules (although they have changed some recently) but management seem to think the ASX should bend/break them just to suit there needs.

The benefit of being listed is 2 fold, liquidity for Taurus' investment and also easier access to capital should they wish to raise (buy another mine, purchase equipment, takeover another company for example).

I can understand your point about Taurus selling 7.8% to enable the 20% free float requirement to be met. Taurus obviously see significant upside value to their stake (like the rest of us) and don't want to sell down. I understand a capital raise will dilute them to the same level of ownership percentage wise, but a capital raise would leave them with more $ invested in the company.
Given the level of ownership Taurus have, I don't think they can then increase their stake without launching a takeover offer.

It's now no surprise to me management have been so quiet on the announcement front. They and Taurus effectively spent 2 months (14/11 to 11/1) trying to formulate a way around the 20% rule. They didn't seem to be too worried about the rest of us.
Now that they realise the ASX won't budge (and they don't have any other schemes up their sleeve) they now seem to be working with more haste on this (given dates mentioned in the announcement), as well as being a bit more upfront with shareholders.

In terms of the capital raise, it will be interesting to see how this plays out. I am not convinced existing shareholders will get a crack at this (as much as I would love one).
Given they announced they need to issue 231 million shares, that amounts to $9.24 million based on the current price. We all know the current share price does not reflect the true value of this company. So any increase in the purchase price of shares offered will increase the amount of money they raise.
Given the maximum subscription on a SPP is $15k, and there is only 12.2% of shares not owned by Taurus, its highly doubtful they could raise the amount required just from us.
I would hope management will be doing all that they can to maximise the price received for new shares issued (assuming family/friends and management don't get them on the cheap).
Given the cash generation at present, they could look at a share buyback to help lift the level of Taurus' ownership.

I hope management will be more transparent with shareholders given they seem to have exhausted just about all avenues.

I read with interest how the ASX charge a company $10k for them to review a notice of meeting announcement.

I look forward to this relisting, and to an increase in the value of my holding in this company.

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Right on the nail here.

RRP Price at posting: 4.1¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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