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Have to remember that 11% is nothing. They won’t go around far, even just a couple of II’s and the company chooses who. It isn’t a fire sale! Could be very sticky shares so SP will recover very quickly. Even if some aren’t sticky, look at north....SP went up even when selling! Remember why you invested and how quick this moves on news!!! GLA
So right, only 10 weeks ago we were at 14p. If someone said IIs would fund us $9m at 40-44p we would be dancing on the ceiling.
This shows how MASSIVE this is. 10% dilution like this, yeh bring it on cause these next two wells send us into orbit £2+
Great post danawinner. The placement was obviously coming, what with PB in London stating that he wanted to accelerate the exploration, whilst not wanting to fund it with debt. Personally I'm happy the placement is now out of the way without too much dilution. I've seen many a share increase in price after a placement, so long as it is for the right purposes (accelerated exploration) and I feel this could well be one such case.
Hi Dana.
Ok, no bother. Understand your post now.
Happy holding long term here and enjoying the good discussions.
Hi Highland Matt,
I realise that it is a minimum of $9CAD or £&mill, I was assuming that it will be oversubscribed and that it will be £9 million.
Normally, I would check the Memorandum and Articles to check the Power to Allot shares, but it is a Canadian Company and the By-Laws are silent on this, however they have stated that the issue is within their Authority.
My experience of doing fundings such as this is that Directors have the power to issue 10% extra shares without needing to go to the Shareholders, and usually in the AGM there is a resolution to waiver this restriction, allowing 15% or 20% new shares without an EGM.
I therefore took a conservative approach and assumed that it would be possible to issue 20 million shares., and that the price will be 45 pence, which is approximately 20% discount to today's closing price. The published U/T Uncrossing Trade is a complete red herring and should be ignored.
The book build is always a bit of a nervous time, but once again, this us usually done in the days before the announcement, and we can expect an RNS in the next day or two confirming that it complete. I have done a few of these, and you can assume that this is a done deal, save for the final numbers.
@Dana. Good point, the cash will add to balance sheet and therefore mcap temporarily.
It will however be spent, but hopefully on something that further increases the balance sheet.
Just a small point, it's $9m, not pounds. It's £7m in sterling, so will be fewer shares (I think 18m).
However, it doesn't change the premise of your post.
One thing is for certain, if there are any shares being offered tomorrow at around 45p, I think there will be a scramble to buy them.
Hi danna,
Even if you use 44p and 38p the impact is negligible. The ii’s won’t get enough and they will buy whatever they can tomorrow. They’d have had a sales pitch from shore and be hoping for some liquidity from weak hands. Remember we have had to buy in small chunks due to NT. it’ll likely close up tomorrow. I’m gonna try and add again from the off taking advantage of any early dip.
GL stoners!
Trek
Dana+Trek. I value both your opinions and fully believe that this is actually a very good deal for us. Keep up the great posts.
Have to remember these are going to institutions only and they will decide how many each II can have. They are not going to jeopardise the SP. It may drop on open tomorrow but it may be very short lived because any drop will be an opportunity for PIs to get in. And what IIs are gonna sell out at a measly 10% profit when they are given golden tickets. Must have faith in PB doing the right thing. I think they will control this and the SP will restore pretty quick.
MCAP before dilution
55 pence X 161,000,000 = £88,550,000
post dilution
MCap = £88,550,000 plus funds raised
Let us say £9million raised at 45 pence = 20 million extra shares.
MCap post raise therefore £88.55m plus £9 million. = £97.5 million
Divided by 181 million shares new total shares
= 53.8 pence per share.
NEGLIGIBLE EFFECT ON SHARE PRICE
RELAX