Sigma and CWG Merger Risks and Management Overview
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Key Risks -
-
General Investment Risks and Risks Associated
with the Entitlement Offer
66
Key Risk
Non-renounceable
entitlement offer and future
dilution risk
Share price and liquidity
Underwriting risk
Summary
Entitlements cannot be traded on ASX or privately transferred. Eligible shareholders who do not take up all of their entitlements under the Entitlement Offer will have their percentage shareholdings in
Sigma diluted.
Shareholders may also have their investment diluted by future capital raisings by Sigma. While Sigma will be subject to the constraints of ASX Listing Rules regarding the percentage of its capital it is able
to issue within a 12-month period (other than where exceptions apply), shareholders may be diluted as a result of such fundraisings and may experience a loss in value of their equity as a result of such
issues of shares and fundraisings.
Sigma is subject to the general market risks inherent in all securities traded on a stock exchange. The market price for Sigma's shares may fluctuate over time as a result of a number of factors, including
it financial performance and prospects, prevailing market conditions, commodity prices and foreign exchange movements, general investor sentiment, inflation, geo-political conditions, fiscal policy and
interest rate rises, as well as the liquidity and volume of the shares being bought or sold at any point in time.
Sigma's shares may therefore rise above or below the current share price, or the Offer Price, depending on its financial performance and various other factors which are outside of its control.
The Entitlement Offer is fully underwritten by Goldman Sachs Australia Pty Ltd (Underwriter) pursuant to the terms of the underwriting agreement between Sigma and the Underwriter summarised in
Appendix G of this presentation (Underwriting Agreement. Under the Underwriting Agreement, the Underwriter has agreed to manage and underwrite the Entitlement Offer, subject to the terms and
conditions of that agreement. If certain conditions are not satisfied or certain customary termination events occur, the Underwriter may terminate the underwriting agreement. Those termination events are
summarised in Appendix G of this presentation. Termination of the Underwriting Agreement would have an adverse impact on the amount of proceeds raised under the underwritten components of the
Entitlement Offer or result in the Entitlement Offer not proceeding at all.
If the Underwriting Agreement is terminated, this could result in Sigma not having access to sufficient capital to fund its near term working capital requirements or its business initiatives. In this event,
Sigma would need to seek alternative sources of funding, which may result in Sigma incurring additional costs (for example, by way of interest payments on debt) and/or restrictions being imposed on the
manner in which Sigma conducts its business and deals with its assets (for example, by way of restrictive covenants binding upon Sigma). There is no guarantee that alternative funding could be sourced
on terms satisfactory to Sigma or at all. Failure to source alternative funding could result in Sigma being unable to perform its obligations under the CWG Supply Agreement. Any of these outcomes could
have a material adverse impact on Sigma's financial position, prospects and reputation.View entire presentation