Ann: Withdrawal of Rights Issue and Revenue Guida, page-5

re: Ann: Withdrawal of Rights Issue and Reven... This has a distinctly fishy smell.

This announcement is essentially Solco saying they have volunteered to cancel an underwritten capital raising because it wasn't dilutionary enough!

It takes a fair amount of ethical gymnastics to see how this could possibly be compatible with their fiduciary duty to act in the best interests of shareholders.

Has withdrawing an underwritten rights issue ever occurred before, especially for such a bizarre reason? How could industry conditions have altered so dramatically in less than a month, and how is this relevant anyway? Since when did underwriting include a mulligans clause?

I would have thought it was management's role to present the facts honestly and let the investors make their own decisions. Instead, they've withheld the facts (except in the vaguest of terms), but taken the decision out of investors hands.

By the Board's own admission, Solco is headed into choppy waters. If things can change that dramatically in a few weeks, how can they be confident Solco can survive without the cash? Even if they don't need the funding to survive, they could certainly benefit from using it to pick up distressed assets on the cheap.

I really can't see how this is in Solco's interests, and if Solco don't benefit, why did they agree? I figure they must have somehow been pressured by InvestorFirst and/or David Richardson, but I can't imagine what kind of legitimate leverage they could have used. Would InvestorFirst have offered to rip up an agreement and pay more per share if Solco's prospects suddenly looked far more positive?

There's far too much "Heads I win, tails you lose" in this industry.