Surprisingly, RBA Holdings announced a rights issue just two weeks after its results. Sure, the results were modest, but why not announce the rights issue with the results? Surely nothing massive has happened in the t wo weeks that followed for RBA Holdings suddenly to require a rights issue? For the year ending December it had paid back most of the director loans to the company, although it still had a bank overdraft of almost R5m (overdrafts are far from ideal).
It is also worth noting that the company issued some 80m new shares during the 2012 financial year, raising just over R10m. This rights issue raises another R10m, but required 125m new shares to be issued as the price has been under pressure. This means 205m new shares would have been issued in the last twelve months, an increase of some 85% in the number of shares in issue.