The oversubscription to the shareholders is great news; it points to little difficulty raising sufficient capital and loads to go straight into the solar Phase 2 and, with a little circumspection, to move rapidly on the pumped hydro here at Kidston and probably to start planning a second one in South Australia or Western Australia.
How will the shares remaining in the oversubscribed shareholder rights issue be allocated?
The fairest would seem to be to start filling all orders from the smallest up and allocating the same number of shares to all requests progressively dropping the lowest orders out when filled. That way all applicants will get the same number of shares irrespective of how much they applied for.
A pro-rata on applications would disadvantage small applicants and encourage gaming by richer folks who would be encouraged to 'park' available funds into the next rights issue expecting that much of it would be returned, if it wasn't there would be increased selling pressure after issue as large applicants recovered their money.
GNX Price at posting:
22.5¢ Sentiment: Hold Disclosure: Held