Tuesday, June 7, 2011

Redcape recapitalisation state of play

Australia's best forensic financial journalist, Bryan Frith, lays out the current state of play for Redcape (ex-Hedley) pub fund in The Australian.

"It is suggested that a recapitalisation would include a renounceable rights issue to existing unitholders, but with RPF units selling at only 16c it's doubtful whether the renunciation rights would provide much value. But, with the fund capitalised at only $26m, a large recapitalisation would require existing unitholders to either stump up significant additional equity or face drastic dilution of their investment."

As previously posted those unitholders include a number of local business identities with past links to Hedley and presumably a good number of smaller local investors and ex-employees, as well as the Hedley receiver.

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