This scenario is based on the following assumptions: i. The parties involved with the re-listing of Chameleon did a reasonable amount of research in respect to the activities of Grimaldi, Barnes and Roberts and the resulting interaction of their roles in CHM and NiCu (later to become Murchison). ii. These parties sought legal opinion prior to proceeding with re-listing. iii. These parties ensured that they had access to the necessary funds to pursue the claim to resolution. iv. These parties stand to make tens of millions of dollars and are determined to see the matter through to final resolution. v. These parties are involved with the underwriters of the rights issue.
With no resolution of the claim in the near term there is little reason for an increase in the sp of CHM and it is likely to stay below 3c at least till the outcome of mediation on 8SEP. Additionally, those associated with the underwriting may well sell down a quantity of stock to keep CHM at the current level through to the end of the rights issue period. With the sp at 3c many share holders may forego their entitlement, leaving it to the underwriters to happily pick up.
A significant number of the 374M outstanding 0.4c options held by the parties who participated in the CHM re-listing funding are likely to convert those options prior to 20AUG to enable them to take an additional stake in the rights issue.
With sp staying around 3c, less than 50% of the entitlement will be taken up, leaving the underwriters to provide more than $1m cash and CHM will still have its $2.3M in the bank.
Underwriter will convert their 20M 2c options by 31Dec08 adding another $400K to the CHM bank.
Meditation will fail.
CHM will meet all its court ordered security costs.
CHM will have its day(s) in court in March 09.
CHM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
