Valuing the PNG Bus w/rights offeringWhat's interesting is if they go ahead with the rights offering the price needs to be below $0.75 (or whatever the payout is: I thought $0.78).
The reason behind this is that current shareholders may not have additional funds to put in which, indirectly, forces them out or to get a lesser % of the company (assuming they allot for oversubscription). Therefore, a higher valuation results in something that sounds incredibly unethical.
Now, assuming that the rights offering is at $0.75 - they've now valued the PNG business at $36.5MM. This is completely low ball. As such, for things to remain equitable, everyone needs to exercise their rights to purchase the PNG business using their RoC. In essence, this renders the RoC moot. Why not just do the prorata in the first place? Oh, because it's a certainty that many shareholders will not want to partcipate. Like Dave R. said in a conference call, "very opportunistic" of them. It wouldn't surprise me if the two reps from Cyrus on the BOD suggested this endeavour.
Disgusting.