Hi Amelbz.....has been a lot to digest, some that was expected and a some that was not.
I still maintain that until all 5 farms are purchased, management have a sheet load of work to do. The info provided thus far provides certainty only around the first two farms with the company then to decide whether or not to proceed with the balance of the other 3. I would agree with the posts of others on our alternate threads in that we need full details of farm valuations, financial input/output ETC to gather a better understanding of profitability/risk. With what we have been provided, seems positive - but we still need more information.
Company directors and staff taking payment via share placement as opposed to straight cash is a vote of confidence - means they are invested into making the process work......otherwise no money honey. That's a positive. CR and associated share "payment" placement to employees will dilute to company further but at the same time not to a level overly concerning.
From my understanding, funding may be in place through private equity and financial sectors for the first 2 farms - the CR may be to satisfy the re-compliance of chapters 1 and 2, improving liquidity AND to assist with farms 3, 4 and 5 purchases. But this in itself raises more questions....
Interestingly, and I have not seen it before in any other ASX listed company announcement, AYB have stated in the document that the CR will increase the MC of the company and assist in a re rate of the current SP. That's a big call......just because funds are raised, doesn't mean the assets or business plan of the company will necessarily be supported by the market! Especially if after nearly a year and a half of talking about buying 5 high producing farms assets, AYB only proceed with 2. It is less about the funds in the bank and more about what the production line of company activities brings to the table. That in itself is confusing, as disclosure around the CR in the document is vague - who is the CR targeted at ? Is it underwritten, who is the underwriter ? What happens to shortfall shares ? Will it be aimed at current holders, soph's/insto's or PE ? Will there be escrow periods ? Will the placement be in ordinary shares or an option series ?
ETC, ETC, ETC....still a lot more needs to be presented to us as shareholders.
maybe the prospectus that is forthcoming will provide these answers.....
So in a nutshell - glass half empty is my sentiment until more news comes to hand. I never speculate on SP future performance as the FA of any company will determine how the market perceives their value. Time will tell....
PDF Price at posting:
2.9¢ Sentiment: Hold Disclosure: Held
