TAM's largest shareholder (HK based Allied Group Limited) may...

TAM's largest shareholder (HK based Allied Group Limited) may well be the culprit. They have the motivation to push the WAP down in preparation for any CR. They have a seat on the board so would be well aware of the the pending CR and recent operational issues.

The lower the price, then the less Allied would have to pay in any rights issue to maintain their shareholding. It also bias' TAM toward drawing upon the undrawn debt funding facility with Allied rather than a CR. Allied may also seek to convert the outstanding balance of the debt facility to equity at the lower share price.

The danger with this strategy is that Allied may well cause TAM to become a takeover target but no doubt there is a poison pill in the debt covenant that would allow them to convert the debt to equity in those circumsances.