GREY:SYXXF - Post by User
Comment by
nostrilon Mar 03, 2015 3:51am
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Post# 23483003
RE:Raising Capital
RE:Raising Capitalschnauser, I accept the fact that the word "capital" is used in a many different ways. However, when talking about the balance sheet strength of a firm I think the word typically refers to the net assets, ie equity.
Plus it is not just the word that SYD uses, but also the context. At the end of the financial year SYD had just $654k of equity. Take into account the losses that it has likely suffered in the first quarter and I think they are right now almost balance sheet insolvent. If it was just cash they needed, I think they would have said cash in their statement, not capital.
Anyway, I guess we will find out soon what they decide to raise. But my assumption is that it will be a private placement of shares with warrants attached. Hopefully even with this dillution there will still be enough upside to go round.
Finally, my preference is that they issue shares rather than debt. While I hope for (but do not expect) limited dillution from a share issue, I would much rather this than the company take the risk of issuing debt and potentially losing everything to the debtholders if the company ran into trouble in the future.
N.