If shareholders don't take up their entitlement, the underwriter will effectively get the shares for 2.4c (with the additional 3% fee). They will probably give these shares to a company like Regal for 2.4c. I personally bought 800k more shares at 2.4c. However, I didn't own many shares before the entitlement offer. Looking at the share price, many retail holders may not consider participating and it's ironic the share price goes down to 2.4c a week before the entitlement offer closes. A good value here IMO for new entrants.
'Lead Manager Underwriting fees pursuant to the offer are three (3) percent ($137,412). Pursuant to the Underwriting Agreement and Lead Manager Mandate, a further three (3) percent fee will be paid to the Lead Manager (up to a maximum of $137,412, assuming 100% shortfall) on shortfall shares placed in relation to any shortfall under the Entitlement offer. Legal fees of $15,000 have been estimated in relation to the Entitlement offer and related Underwriting documentation'.
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