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What would you say it was and why?
(I had intended reply to HeidH)
Suhail you do talk some s41t, you’ve been here 2 weeks and all of a sudden your the professional
HH, looking at our record, I think you would want a good deal to take a placing.
One day!.... Sometime soon preferably???....
“The AIM-traded firm said the subscription was for 393,000,000 shares at 0.275p each - a premium of 10% to the closing bid price on 19 September.”
But that’s not entirely reflective of the actual conditions of the placement, even though it has been portrayed in that manner, now is it ?
Let’s break it down shall we.
Yes, it is correct that a fixed number of shares have been placed with RiverFort, and that is not subject to change no matter what the sp will be over the 12 month period.
However, although the sp of 0.275p has been utilised to form the basis of the sum raised in the placement, what that fails to accurately reflect that the funds ultimately received may be significantly less than the stated £1.08 million, as the ultimate sum raised is not fixed, it is variable based upon the prevailing average monthly sp during any given month.
With regards to the placement being conducted at a 10% premium to the sp on the 19th September, intimating that this is reflected in the sum being raised, isn’t exactly true.
Reason being, utilising that higher sp of 0.275p makes it even harder to company to recover the full £1.08 million, because the benchmark rate that the sp needs to maintain to achieve recovering the full stated £1.08 million is 0.3025p, as a 10% premium has been added to the base sp rate of 0.275p to arrive at the benchmark rate, so in effect the stated 10% premium to the sp on the 19th September is more detrimental than if the placement had been conducted at 0.250p (the benefit of 10% on 0.250p = 0.025p, whereas the negative impact that will be witnessed by requiring to hit the benchmark rate of 0.3025p = 0.0275p).
To better emphasise that is if we look at the sp mid point today for example, as the mid sp today is 0.225p which is 0.0775p below the benchmark rate, with the effect being that the company would receive 26% less (.0775/0.3025 as a percentage), meaning that instead of the company receiving £1.08 million they would only receive £803,306.
Obviously today’s sp is not reflective of the average sp through the entirety of the 12 months, as it is reasonably conceivable that it may be less which means the company would receive even less funds and that exposure is entirely on the company, but if the sp were to remain constantly above 0.3025p on average throughout the 12 month duration it may receive more than the £1.08 million, but only by 50% of the incremental benefit of the sp being above 0.3025p as the other 50% is retained by the placee.
And were the sp to manage to significantly exceed the sp that existed when the placement was drawn up then the placee also benefits by having circa 40 million warrants at a rate only slightly above that figure which they can dump into any rise beyond that diluting shareholders further, and this benefit is at zero risk to them in relation to the £1.08 million that they took in the placement.
As always, the devil is in the detail.
IMHO
Phen- Excellent Post- Exactly
Brockster- you will see this way above 1p by Christmas this year,
Yh true , but surly it’s a normal reaction to be ****ed when you’ve lost a significant amount of dollar- affordable or not
Brockster you do really talk some rubbish, find that happy place, it is only money- if you can't afford to lose it don't play the game.
I hope so I really do but I doubt we will see the sp above 1 p again
Yesterday you could buy these 0.255 , today its 0.245 to buy after placing and half year report rns. Bad news out the way it could have been alot worse. Lots of bitter posters talking nonsense today
No, this is the MMs, buys are 8 x sells, will correct at some point.
Looks like your wrong EB!
Sorry wrong board.
expecting any more news?