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I cannot say I am feeling entirely relaxed about this. I'm sure it is fabulous news for the company making future profits, but less comfortable with where it leaves shareholders who appear to lose control of the company if we do not front up with truckloads of cash. I will certainly be reading the documentation very carefully.
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What is this? Stunned silence? Cheer up guys, life usually works out in the end anyway. The most likely explanation of this is that a dilution of 40% will be matched by growth well in excess of that because of the extra investment in the bigger markets. And if it works out otherwise than that, well the chances are still that it will be okay one way or another. And even if the very worst happens, and this does not work out well ... well, we all know Blis is a risk, and life always goes on anyway. I'm certainly on alert over this, but my optimism remains. Just sitting on the shareholding anyone currently has is still likely to work out.
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Well Simla ...yes a bit stunned. This was the risk in the background now entering stage front. The big fish turned to hungry shark.
I expected the 'big fish' to have 20% but not a nearly 40% holding. Basically in order to survive BLT has sold a huge hunk of the business to the 'cornerstone' shareholder.
I also notice that the need a $1/2m load facility to cover running costs, so the sales aren't that wonderful which clarifies the hopeful thinking some of us may have had, but they do expect to be able to pay interest to the preference shareholders ...which is probably mostly to the cornerstone guy again.
My guess is that Barry was pretty much forced into this deal in order to keep the cashflow going until sales pick up.
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Yes, Oman. You put your finger on the alarming bit in this announcement: what are the intentions of the underwriters? Of course, if we all put in enough money, they will remain small fish. But how likely is that in the current circumstances?
Well, in part, that depends on what we read in the offer document. There are two broad possibilities here. One is that the company needs cash, and that things are not that rosy, possibly even quite down. The other, however, is that things are very rosy and that big wads of cash are needed to keep the company going through an expansion. Now, if the news was bad, why would the underwriters be trying to take a bigger stake of a losing proposition (or any stake at all, as they seem to be under no obligation)? So I'm inclined to think that Barry will be selling us a happy story. (What I expect to be missing though is any communication from the underwriters about their intentions, which will be a real elephant in the room if so. If we are to vote these people an interest that will drown out most opposition, decency would dictate that they tell us why we should.)
If the news is good, then maybe existing shareholders will put in money. After all, if profits are awaiting, then a 10% dividend and participation in increasing share price is a better deal than offered pretty much anywhere else at present, subject to the uncertainty of three years conversion. The trouble is that the deal is so overwhelming that it is hard to feel that putting money in is going to change the overall ownership stakes much, which will discourage a lot of people from even trying.
Although the underwriters seem to have a staggeringly good deal here, 10% dividend and wads of shares at 4 cents as I read it, yet they do not get to stop other shareholders participating in the future unless they successfully launch a full takeover. I would hope there are enough shareholders who would refuse any such offer given how far we've all come, in which case the future goes on.
There are 3 questions on the table at present: 1. Do we vote this down? 2. If passed, do we put in money? 3. What is the outlook for minority shareholders after all this is done (since the outlook for the company and the outlook for shareholders are starting to look slightly divergent)?
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Hi, its just me posting, im in Auckland.
Its the only share i hold and I have acquired a decent holding.
Thats why i only post about blis.
I am interested in others though for different reasons
GPG-Long term hold, diversified
NZO-Long term hold
PVO-Market Capitilisation really low, rights issue? requires more research though.
GEN-anyone Know about reverse takeovers, for all the tax losses?
SKC-Maybe good to short, I think is overpriced looking at NTA, plus casino looks very quiet lately.
Some shares I have held in past:
GPG
CEN
AIA
BRY woops first share
SKC
BPC
WRI
But in future i am very keen on having a balanced portfolio, using risk managemt techniques and stop loss.
Looking into trends etc
BLT rights issue Kinda remains me of the Dragons Den, giving up alot of equity to get a smaller share of a bigger pie.
Most of the time i think it is good to do a deal with the dragons.
Hopefuly blis with substantialy more funds can proced more aggresively.
Blis just got 300k in sales in november and 400k from edinburgh in december, i find it
strange they need to borow another 500K?
Also read they expected to recieve 750K from Nestle in december?
Admitedly it is a bit depressing knowing that i dont have the available funds
to take up all my rights even if i wanted to.
I have so much invested already i dont really want to buy anymore, plus i doubt you will
be able to sell any rights on market.
Plus I think it will be a few years yet till blis starts to make any decent profit.
But i am realistic in todays market it is difficult to raise funds, and Blis would have
very limited options,
Barry and some of the directors also have decent shareholdings, so i have faith
they are doing what they think is best, They do need to raise funds to grow.
I almost certainly will vote in favour.
Eion Edgar said in ODT he believed in products and wanted blis to remain Dunedin owned.
Will be interesting to read the prospectus!
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That bit in the ODT was interesting, thanks TheOne. I do wish Barry would put into the shareholder announcements the stuff he puts into the ODT! In particular, it said, "shareholders would also be asked to approve an option for Edinburgh to buy an additional one million preference shares if they could not get an adequate stake from the initial offer", which is a far more reassuring version than they can just have the million because they feel like it. I wonder if the vote will have that nicety in it though.
However, putting aside other concerns, this does threaten to be the moment of seriously good news we have been waiting for. An expansion of this size is presumably based on some fairly solid cash flow projections.
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Thanks for pointing out the ODT article. It was worth a read.
http://www.odt.co.nz/news/business/4...or-shareholder
Specifically
"Blis would use the $3 million for some capital expenditure, working capital and to secure more regulatory approval, including permission to use its flagship Blis K12 in food."
Based on recent events I am leaning towards this being a positive announcement. I think the "lions den" analogy is appropriate in this case. The company needs capital to take the immediate opportunities and Edinburgh Equity (Eion Edgar and Dunedin businessman Tony Offen) want more of the pie.
Even when the additional shares are converted there will only be just over 200M shares on issue. So even if they are aspiring/projecting earnings of only $2m p/a it would justify a share price significantly higher than todays. If it is $20m p/a then exisiting shareholders will all be smiling.
For me I need to decide if I am prepared to sell other investments to fund this rights issue or if I will just sit tight (if only I had enough cash to be a dragon)
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Could be interesting watching the share price for the next few weeks. Theoretically, the rights issue has just set a bench mark of 4 cents.
Not so simple though.
(a) For a start, some people may be keen to sell up and just get out now, assuming this is bad news.
(b) Those who assume good news may think the preference shares are the way to go. After all, they pay a 10% coupon, which beats the current dividend, and they theoretically participate in any share price increase too.
(c) But, if we assume a $1 preference share is 25 shares equivalent, then 10 cents is just 0.4 cents per share, and there looks to be no participation in dividends till the three years is up. If the news is good, real dividends may be well in advance of that by 3 years.
(d) Those who want liquidity may feel the preference shares will not trade well (I suspect they will be fine myself, once profit is reached).
(e) If the preference shares turn out not to trade well, then real shares are the better option if you expect good times ahead.
(f) The presence of the funding in the rights issue should imply a good future for the actual shares anyway.
(g) people may feel it is now or never, that if this is good news, the share price is just going to start marching up now, and keep marching up.
Add to that the uncertainty until the actual issue document comes out with either good or bad news. And the slight uncertainty the issue will proceed. (Yeah. Like shareholders ever do anything when acting as a group except vote in everything put to them! Still, you never know.) And finally mix in the ever present problem of truly, truly awful world conditions.
So, will the price go down? Or will the price go up? My guess, just a guess, is it will go down in the short term, then start to pick up, perhaps quite strongly if the news is good.
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We seem to have missed this one. Don't know how long it has been there. Described as "Adult's Ear, Nose & Throat Lozenges with K12 Probiotics -- Tropical Cherry Berry Flavor"
http://www.naturesplus.com/products/...54&category=28
http://www.naturesplus.com/products/photos/49254.jpg
Interesting to reflect, though, that both of these Nature's Plus products appear to be just repackaging of Blis as we already have it. If Blis really is having impact in the neutraceutical market - which is surely food additives - then neither of these qualify. Suggesting these are not indicative of the news that we are hoping for.
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That was a snappy letter from Blis offering us all discounts on Blis BioRestore. Very proactive. Perhaps we are being guinea pigs to try out on line sales? Have people noticed that the Blis website has also been redesigned, heaps better in my opinion. The website also states, "BLIS products will shortly be sold through IPOS Pharmacies in Ireland", suggesting negotiations but no actual sales during these last few months.
Offers to buy Blis shares have evaporated, so at least some people are obviously saving their cash to buy the preference shares. The question is, how many? If the offer document is looking promising, I expect to put at least some of the money in. The fact that Blis have taken time to redo their website, and seemingly are about to launch online sales, suggests that this company is far from rolling over dead.