UXA Resources rights issue of 4 shares for every 10 held at 1.5c a share has some interesting, well for some, possible outcomes.
1). There is an opportunity here for an individual or company to obtain a very big interest at just 1.5c a share. UXA is allowing applications to apply for any shortfall in shares and that is indeed quite likely in present markets.
It would not surprise be at all to find a stockholder/company owning up to 20% of UXA and being invited to join the board of directors.
UXA have a 100% holding in what is now a very vibrant GAA Wireline (GAA) both in Australia and USA. Chairman Neill Arthur was upbeat about the company but the Aussie side was sunk in the last trading year by events in Queensland. This part of the company 'GAA' is worth more than UXA Resources itself. The value of GAA will not have been lost on other companies even if the mining projects are seen only as 'a punt in the dark'.
2) The rights issue is NOT underwritten and therefore UXA Resources, looking on the dark side, could raise very little - we shall see. UXA have a clause that allows them to sell the remains, not taken up, part of the rights issue any time in the next 3 months for not less than 1.5c a share.
UXA Price at posting:
1.7¢ Sentiment: Hold Disclosure: Held
