Thank you, Luckystrike. I don’t want to be too critical of the board, but while they might have worked hard right up to the end I would like to know exactly what they were doing. I am not sure that a TO should have been their only option given the time they had to plan. I have been rabbiting on about capital raisings and TOs, the nuances of which, I know didley squat. I have researched the internet trying to find out how long a capital raising process takes. I have not found a definitive answer, but get the impression that a quick capital raising takes at least three months. This would seem to indicate that when a company has funds for only three months, and relies for its existence solely on capital raising, would have, in the absence of some other form of funding, a capital raising process set up and ready to fly. Based on this time scale, the board, if it had no prior knowledge of the TO offer three months out, would probably have seen only insolvency on the horizon. Yes, they didn’t have much of a selling story but I guess it would be along the lines of “capital raising or insolvency”. They must have had a reason not to capital raise; but what was it?
On 27/3/20 theyknew they were in trouble, only a month of funding left presumably too late to rectify:“LNGL’s existing funding is sufficient to meet all of LNGL’s commitments untillate April 2020, but LNGL needs to secure additional funding (through LNG9 orother sources) urgently to continue operating beyond then.” It would seem to me now that this was the time to get out, and if things improve, buy back in. (hind sight).
So, I think thatit would be prudent of any company which produces nothing and depends solely oncapital raising for its existence, and assuming its takes a minimum of threemonths to effect (time scale need clarification), would have a capitalraising process set up and ready to implement at short notice.
There must besomeone on this forum who has some in depth knowledge on the finer points ofcapital raising and TOs. Another thing that I can’t find out is, “are there any restrictions (eg capital raising and the like) on the operations of a company under TO offer”. Come on JW, its time for your 10 cents worth. Regards J L
