"It's not the fault of the ADI directors that the market was under-valuing the company.They are bound in to confidentiality with Hilcorp."
IMO yes it is the fault of the ADI BOD - they signed the stinking agreement in the first place!! In the second, they not only didn't tell shareholders what was going on they took a 'top secret approach' to almost all the information. Third, IMO they were made to look bad and like hicks every time information was released on the Internet ahead of the JV.
"They raised capital to meet calls for the next stage of the drilling campaign - not confirmed but EME did similarly. They couldn't dally about."
Pure speculation on your part and not confirmed in any way by the company. Dally? EKA raised money two months ago in March. And we still haven't heard anything about the supposed well program. And the numbers don't add up as EKA raised only some $2 million. ADI cashed up way more than that.
"The best interests of shareholders are to remain part of the JVP. If they needed cash to secure that, as seems likely, I don't see what other option they had. If the posters talking about debt finance are serious, why did they not line it up for the company?"
Again pure speculation on your part. Debt financing is available to many companies and I'll give the worst example I can think of in the market: MAE. The second worst: GDN. If these two companies were able raise funds then there is no excuse for ADI. Of course the big daddy of them all, AWE, has lots of cash.
The cost of the cap raising to the company was huge: the 5 cent or so drop in the share price caused a drop of about twice what they raised. They could have paid 20 or 30% a year if needed and done a SPP at a higher price after the wells came in.
And as I have stated before, there is no 'profit' for the big end of town in doing a debt financing. A cap raising greases the big end of town and in this case it backfired on ADI as those shares will now go bye - bye ASAP.
"But, secure it on what? What term would a bank agree to? It shouldn't be a problem to sell 3 - 6 (possibly) months receivables, but Hilcorp has first claim until its expenditure is repaid. "
See above.
ADI Price at posting:
41.5¢ Sentiment: LT Sell Disclosure: Not Held
