Today's release is good as far as it goes but begs key questions. These will presumably be answered in the Offer Document on 3 June or the shareholders briefing in Canberra 8 June.
I might be misreading but the Release seems to say shareholders can subscribe for shares up to a total of $15,000 and not on a pro-rata basis. If that is right and many smaller shareholders subscribe for the $15,000 limit the Top 20 will hold proportionally less. Last balance date the Top 20 held 77% and given these generally seem to be long term holders this concentration would have contributed to the thin trade in XTE. Being so thinly traded is one of the reasons why XTE is not well known. Having its shares held and traded more widely might help XTE's potential be better recognised and reflected in its capitalisation.
The release also helps explain termination of the Kentgrove facility. As I recall the Kentgrove drawdowns were each of $0.25m where the underwritten part of this CR is $1.25m ie raises capital in one bigger lump. That begs the question that if Paterson Securities picks up significant under-subscriptions is it likely to be a patient investor?
The release also says broadly how funds will be used but does not provide details in particular of how the UAS negotiations are going and current trading. Again presumably we will learn more from the Offer Document and briefing.
XTE Price at posting:
42.5¢ Sentiment: Hold Disclosure: Held
