ERG 0.00% 3.1¢ eneco refresh ltd

dilution adjustments

  1. 99 Posts.
    Ladies and Gentlemen

    As previously foreshadowed, ERG had to deal with the convertible notes on issue.

    This announcement vindicate my previous comment.

    If I am not mistaken there will be an additional 1.667 billion shares on issue. ($250 million divided by 15 cents)
    Add this to the existing issued capital base of 0.936 billion shares = 2.603 billion shares on issue, add to this the private convertible notes which come into play, plus the underlying risk of the Proton deal, we have some serious issues on the agenda.

    This transaction will result in ownership of the business changing hands into to CN holders.

    Post Deal (assuming it happens) CN holders will hold 56% of the business.

    On top of this transaction, ERG is asking poor old shareholders to participate in a rights issue for $50 million. More cash on the table, not even 12 months after the last rights issue at 50 cents. Now the deal is at 15 cents (which equates to an additional 0.333 billion shares)

    Perhaps existing shareholders should think very carefully about participating in this deal.

    If dilution is on the agenda, the share price is at risk.

    As for the companies future, well desperate times call for desperate measures. If the true believers can not see the reality of the situation then they truely should seek some professional advice.

    Entering the market is a dangerous game. In this case it is clearly a risk to trade this stock. i have continued to indicate this in my commentary, I do not hold this stock, I have never held this stock, please do not assume that my entry into the debate is based on financial gain as i have been accused off.

    I have traded the market for many years. Sometimes, as an interlude, a stock attracts your attention, perhaps it is the hype and the emotion that surrounds this stock that fueled my interest.

    Today was one step along the journey to rebuild ERG. There will be many more....

    The Board, the CEO should all look in the mirror and ask themselves have they acted in the interests of all shareholders...Today you can make your own mind up.

    Tommorrow the market will indicate which way the compass will point, North or South.

    On the deck of the Titanic, the Captain and Crew need to understand that an iceburg is cold and hard.
 
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