I'm not saying that Pat's has done anything wrong, They needed to manage their risks, and the conditions of the cap raise underwriting were clear, and this was probably perceived to be the best offer management had available to them.
However - if the underwriting was conditional on the SP price, then this phrase that the CR is fully underwritten really is a nonsense. Conditionally underwritten may be a more helpful phrase. Also why else would the underwriting be needed if not because it might go underwater. Arbitrage is still alive in the markets - even if never perfect, and PLA is a well known listed co - esp when condidering their market cap.
In my opinion the price was set too high. Better to have done the initial placement at a premium with the new shareholders (even better if focus was on getting a good "name" on the list) eligible for a discounted cap raise at "lucky" 7 cents pro rata. There would have been complaints re extra dilution - but sometimes the hard hats need to be donned. These discounted can raises can generate some greed when done well - human psychology being what it is.
Of course it is very easy to offer these opinions in hindsight, when an outcome appears clear. Maybe what i have suggested is what they need to do now!
I feel sorry for all holders - not a comfortable position I am sure.
PLA Price at posting:
10.0¢ Sentiment: None Disclosure: Not Held
