share purchase plan offer, page-18

Two of my pet hates are not being given ALL of the info and not fully understanding what or why something is happening.

If I get into a situation where this is occurring and my attemps to gain the knowledge by questions and discussion fail then I generally pull up stumps and walk away.

It has served me well over the years not just in the share market but in life in general.

Life can be so very peaceful and enjoyable when you do that. :-)

Ok. So I contacted ORP with my questions. I couldn't resist. I have a burning desire to be informed and kept up to date with what people are doing with my money. :-P :-)

The answers (rough translation) :-)

It appears that Blackwood have indeed fullfilled their part of the bargain as advised to the ASX and in due course I guess we will see something that tells us about the remainder of the convertible notes issue. Kudos to them and ORP for completing this.

The current SPP does indeed appear to be driven by their acknowledgement that smaller shareholders or non "sophisticated investors" have voiced a request to be involved in fund raising initiatives. Once again, kudos to ORP for recognising this and making the opportunity available.


NOW, having said all of that. I find myself in a catch 22 situation.

The way the SPP is structured means that if the share price is high in that crucial week before closing of acceptances then we would have less dilution of the share register because the amounts that can be subscribed for would buy less shares. This is clearly a good thing for the overall health of the company and in turn all of shareholders as we would be rasing some nice cash with very little dilution. The other benefit of course is that current shareholder holdings would be looking a lot better on paper. :-)

If the share price is low in that final week then we get higher dilution but subscribing shareholders get a nice opportunity to make their own investment look a lot better on average or simly increase their holdings at a good price. This is clearly beneficial to individual shareholders but not neccessarily that great for the company or shareholders as a whole.

I don't know which situation to cheer for! :-)

If I was pushed I guess I would cheer for the first situation as I probably have enough invested and don't really need to buy more.

On the other hand if the second situation was the case then I guess I would be tempted to take advantage of it as I think in a few months time I will be kicking myself if I didn't.

I guess it's a win win situation if the share price does some nice things over the next few months.

Cheers
GazzaT

PS: My sentiment has changed from 'buy' to 'none' because I can't see the point in an exisiting shareholder buying to top up their holding at this point in time. Once the SPP is over then that is a different kettle of fish. :-)