The prospectus for a rights issue at 12 cents is due for...

The prospectus for a rights issue at 12 cents is due for despatch on Dec 2, in three days time. The stock is trading at 10 - 10.5 cents and the rights at $0.009. The underwriters have the right to withdraw as the stock has traded below the underwriters threshold value.

Why would PLA proceed with a rights issue at 12 cents under these circumstances and why have Paterson's not withdrawn from the underwriting? One possibility is that there is a buyer for a large number of shares at 12 cents in the wing, shares that they could not get in volume at this price without forcing up the SP. If not, then maybe PLA will reduce the issue price to 9 cents or will make a positive PR over the next few days. Or maybe they will do another Smokey Hills and issue another apparently non viable proposition.

Interesting times ahead.