RE:Key line from PRThey are upping the previous anouncement and now it will be a total of 21 927 966 more shares (including warrants and over allotement), if you divide that number by the total of 121 millions shares fully diluted (as per the AltaCorp presentation) that gives 18% dillution, NOT 10% ! I understant and hope long term they will make our market cap double down the road with this and understant they need the money... But as a long term holder 18% of the company is a lot... Still preffer traditional dept and sure they could have got it with all the contracts they have.. Anyways what is done is done... Better be good...
Fundy13 wrote: "The Company plans to use the net proceeds from the Offering to strategically increase the Company's domestic geographic presence, increase production capacity and white label offerings, and for general corporate purposes."
They have been talking about expansion and they need cash to do it. Lending is still not an option for VGW through traditional channels which leaves them with three options, wait a year until revenues support the expansion naturally and miss out on mnay opportunities in the next year. Convertable debt which means interest expenses and would likely result in dulution down the road or what they did with a bought deal. They get the case we get about 10% dulition and they use the money to double or triple there capasity. I think they made the right move.
They need a location on the east coast and hopefully one internationally.
VGW has a smart management team, last time they announce a bought deal it was followed up with announcements of the licence and they a slew of contracts. This time we will be hearing about the expantion plans within the next month or two. The demand is there for their service they need to capitalize on it and cement themselves as the top exstraction service in the country.