RE: RE: RE: RE: Ethiopian Spinout?It depends on how they spin the project out. I assume it will simply be the property that get's spun out and zero cash.
If it's a newco, then the spin out is non-dilutive to existing CAN shareholders to begin with. But a project with no cash to develop it is worthless. So, the newco would have to do a financing anyways to get the project rolling and in the end, it will be dilutive to minority shareholders. I assume the subsequent financings of newco would go to the insider friends. Minority shareholders may be given a chance to finance with a warrant but most minority shareholders do not have the cash to invest.
If it's a cash rich shellco, then it's dilutive to existing CAN shareholders right off the bat.
Either way (newco or shellco), a spin out of the Ethiopian properties will end up being dilutive to minority CAN shareholders (in my humble opinion). Which avenue they choose depends on which option is most tax effecient and expeditious as outlined in the company's press release.
Interesting1