RE: Potential11 May 2021 09:11
Bertie
Effect of any placing on SP would depend on price and size. Given that nothing was in place before the RNS, the recent fall would not include any effect from any placing.
They wouldn’t be going ahead with the consolidation if they were also planning to do a placing separately - they would do the whole thing in one big transaction.
They wouldn’t be announcing a need for finance just before doing a placing.
The more I look at it the less likely a placing is. Not impossible, but highly unlikely.
The costs of development have to be taken somewhere. Either a placing, in which case shareholders either pay up (if given the opportunity) or get diluted, or debt, in which case interest payments reduce the profits available to shareholders, or a partial sale/JV of non-core assets, in which case someone else gets a small share or profits that would otherwise go to shareholders.
The RNS spoke about incoming interest in Little Deer/Whaleback, suggesting that would be a low stress route to finance.
It also inevitably knocked the share price, as management knew it would, suggesting that they weren’t planning a placing.