Total capital raising higher than expected at $27m.Post...

Total capital raising higher than expected at $27m.

Post completion, approximately 167.5m shares on issue.

Net debt reduces to approximatley $50m, from around $75m at present (it was $77m at 30 June).

A concern is the excess cash that will not be used to repay debt. Of the $27m raised, only $15m will be applied to debt repayment. The company is holding onto $10.7m of it, suggesting some acquisitions are planned; hopefully not the same crap the company bought over the 2004 - 2008 financial years, which was then disastrously written off. Preference is to use it to buy day surgeries, rather than to buy doctor goodwill.

Valuation in the region of $26m x 5 times ebitda, less net debt of $50m over 167.5m shares, being 48 cents, at the lower range of expectations. At 6 tmes ebitda, valuation increases to 63 cents. As previously suggested, mid point being mid cents 50's, compared to 34 cents issue price to registered shareholders and underwriters. CEO is an underwriter at a $510,000 commitment.

Any rights/shares not taken up by shareholders registered by 7pm Wednesday 19 December will be taken up by underwriters, which mainly comprise Bell Potter clients and PRY.