Spoke to the CFO today who confirmed that the share register expanded from 3,000 to 15,000 in the two-day window period between the announcement of the SPP and the effective "ex-date". He said the original intention was to raise $15-20m to pay down debt, but when they became aware of the level of interest in the SPP, they decided the plan would be to pay down debt in the short term, and then in the longer term, to use the additional capital to grow the business.
He said that while he can't speak for the board, he feels that the company will take virtually all the capital it can get through the SPP, and that if there is a scale-back, it will likely affect those shareholders with <100 shares. When I suggested that the company may receive applications in the region of $150m, he said that that was the figure he had in mind, and that he thinks BKW would want to raise at least $100m. However, this was all his opinion and apparently not a decision made in any boardroom discussion.
He predicts (quite reasonably) that the share price may fall considerably when the new shares start trading, as people offload them at a profit. That said, at today's closing price, the SPP is in the money by $2,321 (15.5%), so there's plenty of room to move.
BKW Price at posting:
$14.32 Sentiment: None Disclosure: Not Held
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