The index change was a consequence of the drop in share price which was a consequence of the highly discounted issue which was a consequence of having to set a low price to convince larger shareholders to put in lots more capital which was a consequence of the requirement to pay off potentially crippling debt which was a consequence of trying to develop a capital intensive mine with insufficient capital reserves!
Simple really! It's not for a cynical reason. They had little choice. If they had not done something like this they would have continued paying high interest rates & charges & ended up getting to a stage where the company would have had to have been almost given away in order to survive without much hope of a good return for shareholders. Holders are fortunate indeed that they took this method of raising funds rather than issuing to "sophisticated investors" and leaving previous shareholders with litle option but to have their holdings diluted.
At least now debt will be prety well paid off and previous holders were able to top up at the discounted rate to preserve their share ratio in the company if they wanted to - and also to buy back in now at an even lower price (for a little while) if they took the opportunity to sell out previously.
TAM Price at posting:
12.4¢ Sentiment: Hold Disclosure: Held
