With the initial options possibly doubling the number of shares on issue by 2012, an 8c 2012 piggy back option, is like a 16c option under the current number of shares. Not very likely to be exercised IMHO.
Ironically, if a large number of options do get exercised by Sept, then it increases the likelihood of a dividend, as they will then have plenty of cash (I hope).
No word on the directors taking up their entitlements. Or the large Chinese shareholder - I can only assume they were asked to chip in for the funding and said 'no'.
If you pay 1c for the option, and 4c to exercise it, you are paying 5c for something you can currently buy for 3.5c - in 2012 dollars this might be OK, but not in 2010 for me.
The more I think about this capital raising, the less I like it. Nice company, but these options will remove a lot of the upside.
DYOR
HMC Price at posting:
3.5¢ Sentiment: None Disclosure: Held
