I have heard good suggestions about incenting management (basically I think we're talking about Charles) and I've already expressed my opinion on this. However, when we talk about bringing cash to the company to increase drilling opportunities, it is not as clear for me what are the best options.
My disclaimer - I am a novice regarding the details of securities laws and deal-making. I have more of a big picture view. There may be reasons that I'm unaware of why the following suggestion wouldn't work in AMEP's case.
I want to mention what I believe is a real win-win situation for a company needing to both raise money and treat shareholders equitably ... and that is a stock rights offering. A rights offering allows current shareholders who have the means to keep their percentage ownership in the company at the existing ownership percentage. By making the new stock offering to existing shareholders first, management is boosting shareholder loyalty. If a rights offering subscrition is not fully subscribed, only then are the remaining shares offered to the general public. The investment bank takes a percentage fee in shares for doing the offering.This type offering could be done in conjunction with a reverse split. The new stock is usually offered to existing shareholders at a discouted price.
An excellent example of a stock rights offering was done by USG (United States Gypsum) , a company with a loyal shareholder base who's owners include Bershire Hathaway, did a rights offering as part of a deal to exit bankruptcy protection. By doing this, they allowed the current owners to either maintain or increase their ownership percentage in the company by allowing them to pay for new issued shares first.
As we talk about suggestion on raising money for expanding drilling opportunities, a STOCK RIGHTS OFFERING may be an accetable option.
AI
