Ann: Offer to Participate in SXG Share Purchase P, page-5

re: Ann: Offer to Participate in SXG Share Pu... Hi Sally Yes, this is all starting to sound pretty good and I sure hope that they can deliver.

The last year or so has gotten me in the habit of looking for the black lining in my gold clouds though. Here it is for this plan.

According to the 2008 annual report there are roughly 2000 holders of SXG. If each of these take up the full $5,000 offer, then that means about 142m more shares. More than double what is already out there. That dilution means that small holders will just about be diluted out of existence unless they take up the offer. Over half of all holders in 2008 had less than 5,000 shares. It could also put a real crimp in POL's share (from about 18% down to about 6% before options so I don't think that will happen).

If that scenario eventuated, then it would also raise $20m. The announcement said they were looking for only $1.4m to complete the work so a couple of things will have to happen. They will have to scale back, or have a small uptake of the offer. I would think the uptake would be good given the share price lately, so that means a scale back is probably in order (Maybe at POL's and WSA insistence). Hmmm, maybe they will even withdraw and change the terms a bit.

In any case, I think it is looking good. I'd prefer that they kept the number of shares on issue comparatively low - but I won't be doing my part. I'll be looking to take up the full allotment if I can find the cash - still have the POL SPP to take up.