WHAT'S the surest sign that the market's looking up?
When a private equity mob like CVC starts grumbling that it doesn't have enough shares in a tiddler company.
There's been lots of excitement through the GFC about CVC having to write cheques to keep the banks at bay (vide Stella and PBL Media), but now a stoush has blown up with Amadeus Energy of Perth over CVC being diluted by a major share issue.
AMU wants to raise $25m through the issue of 96.2 million new shares, mostly to sophisticated investor clients of Hartleys, at 26c a share, which is a cent above yesterday's level.
The new issue would represent about 50 per cent of the value of all existing shares.
CVC, which only has about 2.5 per cent, has rounded up others to make the 5 per cent quorum to call an EGM for September 9. It is calling on AMU shareholders to reject the raising and roll the board, chaired by serial exploding cigar victim Andrew Peacock.
Amadeus says the money is necessary to strengthen the balance sheet, maintain and grow production and take advantage of growth opportunities. CVC says the $25m would be directors' play money as AMU's cashflows are good and gearing is relatively low.
CVC's been churlish enough to point out that there have been no dividends, the AMU market value has halved, its share price has fallen by 66 per cent and an independent corporate review has said a raising is not required as cashflows can service interest and operating costs.
AMU Price at posting:
26.0¢ Sentiment: Hold Disclosure: Held
