ocean wide interests

As we all know OW have approval to raise their interest in CDU to 19.99%. I believe the Australian institutions have just handed them the opportunity on a plate by keeping the current share price low.

Looking at some numbers....

OW if they took up their full entitlement of the rights issue would have in the region of 35,985,236 shares, which isjust over 15% ofthe company if the rights were fully subscribed.

This would leave 11,612,917 shares to go. Just like everyone else, they can apply for extra shares from the rights issue, but they are not guaranteed to get them unless the rights issues was a total failure.

However if they bought a whole swag of rights cheaply on market, then they don't have to worry about "hoping" for an undersubscribed issue. They will be able to lock in the extra shares they require/want.

There have been about 5 million rights change hands since the new JORC on Friday, there are about 2.75 million at the ask for 1c or less. If OW were the purchaser of the bulk of these, then they would only need another 3-4 million shares to reach their target.

If/once it becomes known that OW have taken up lots of rights, and therefore the company has all the money needed in the rights issue (even if the underwriter took the rest), then the share price would rise greatly. The shorters would knowthis and need to cover quickly. OW would also be wise to this and want to pick up as many shares as possible before the information about their extra rights buying became known.
What does it all mean? I expect the share price to stay low today, the last day for rights trading, then rise between now and 11th Dec as OW try and pick up as many shares as possible cheaply between now and then to get to their 19.9%.

The above is all conjecture, but from OW's perspective, it is a way to purchase 11m shares for $2.50 and lower, plus pick up lots of options for free.

The alternative is for them to take up none of the rights, sell some of their sharesover the next week to keep the price low, hope for a shareprice crash, due to failed rights issue, then try and pick up lots of shares cheaply. This might also work, but could backfire if the company announced the crushing/sorting and start of sales of NCu.

As overall OW want the company to be a success, as they already have a high investment in it, then the first action is far more likely with less risk for getting their shares and showing an immediate gain on their costs.

Sorry about the long post.