It is disappointing to see, that positive announcement like this fails to move the market.
In my opinion, the Hunter Hill deal is crushing the CBD's SP.
By overgenerous sweetening of the convertible notes deal, the management gave guaranteed huge profits to HH and the falling SP is the consequence.
Far from being financial master stroke, this now appears to be one of the poorer decisions CBD made.
It would be far better IMO to go for a SPP in order to raise additional capital. This would distribute the new shares across large share holder base, to hands of people who believe in long term future of the company rather than unfairly favouring a single investor who could not resist turning fast buck. Did not the directors seek some guarantees that HH will not dump their stock on the market, before behaving like an early Santa Claus?
If they needed the cash, why did they not approach their Chinese partners, who seem to have pretty deep pockets and usually take a long term view of their investments.
In my opinion we will not see much improvement in SP until HH stops dumping the stock and given the recent volumes this could be a long time.
CBD Price at posting:
11.5¢ Sentiment: Hold Disclosure: Held
