A capital raising indeed !!!!!. And if it is to fund the increased volume of profitable work as highlighted in last week's Annual Report then that is truly game changing. Capital3157 as you note, EGL has over $700k of cash on the balance sheet and unused bank facilities of over $5 M including $3m in unused overdraft facilities. That begs the question why an equity raising now. The cost of equity capital is a multiple of the cost of the existing bank facilities with an average interest rate in the 3-4% range. Presumably EGL's CFO has done a detailed analysis of the relative cost of equity and debt capital. It would be an interesting worksheet to review. Hopefully the capital raising documents will provide great clarity with a detail explanation of why an equity raising now and how the funds will be applied. A good old fashioned source and application of funds statement would go a long way to informing the loyal and long standing shareholder base.
DYOR IMO Clare
EGL Price at posting:
2.7¢ Sentiment: Buy Disclosure: Held
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