EHL restructure approved, page-5

Hi Names little

The disclosures at the time of the rights issue said they would either have to sell bonds and options that took them over the threshold or get Shareholder approval to convert if they wanted to rise above the threshold..

They picked up $1m worth of bonds and options above their entitlements through the underwriting which if converted would I think take them to about 33% on a fully diluted basis.

Their third option at the September conversion date is of course to make a takeover bid. The price that the bid would have to be at to satisfy the law is something I don't know. In a normal situation where they bought shares above the threshold the takeover would have to be at that price. I'm guessing they would only need to make a bid at 3c, if they got all the rights they have for free. They could certainly make the bid at a higher price which they might do while they are bearing the cost of a bid in the hope they pick up a few more.

They may not be inclined to buy more bonds and rights because that would muddy the waters in relation to the shareholder approval exemption that is associated with an underwriting agreement. That might be why the majority of trading has been in the ordinaries even when the options and bonds have offered a cheaper entry price.

The next six months will be interesting.

Hgo has a lot going for it on a few fronts.

Buy and grow rich.