Replies to post #263755 on ERHC Energy Inc (ERHE)

[emdyal]

So at least in part the sp is at it current level because of their reckless spending along with their inability to effectively convey to the markets what their plans are and now they want more of our money to reduce the effect of dilution ?? What about all these people who don't have the money to do that ?

They take shareholders money by dilution and then in effect want them to buy back their own money . Is that about it or am I missing something ??

I mean who was the criminal who initially put this scheme together ?

[jsc52033]

tryoty I have seen these type offering befor. Most have included a warrant to acquire additional shares for a year or two at a price usually higher then the offering. This sweetner gives the risk taker another shot should the venture prove successful and price rises drmaticly.

I keep looking at the .20 to the board if price hits .75 and holds. I think they saw this coming. A discovery will bring up the SP and they will exercise. Any Share hodler who also has warrants will have a similar oportunity.

Now if the offering does not include warrants I will not buy. SP has a good chance to retract after the inital offering is complete. I can not believe they don't have a buyer waiting to take shares we can't. That type investor normally demands warrants. JMO

[midtieroil]

You have to be kidding. ERHC already told told us what they are going to do and NOBODY seems to want to discuss it intelligently. They want to raise 50 million dollars through a rights offering to existing shareholders. My guess would be that each shareholder will have the "right" to buy 1 additional share for each share that they currently own. So each shareholder, including Offor/Chrome will have to decide how many shares they want and if the offering price is good enough. My guess would also be that they will price the offering at no more than about 10 cents per share given the current share price. These rights offerings are generally at a substantial discount to market. So my guess would be that they will issue somewhere between 500 million shares and a billion shares to raise that $50 million dollars. As far as I can tell that IS the plan. I don't really expect to hear any other plan.

Then you have to get into the other details of this plan. Such as will there be someone backstopping the plan. A backstop is when a broker or investment banker or an AFFILIATE agrees to buy the shares of the rights holders that decline to participate. But this backstop comes at a pretty steep price. It guarantees that that the amount they want to raise will be raised but ERHC would have to pay for this. So rather than raising 50 million they might have to raise 60 million with the rest going to the party that provides tha backstop. And Offor/Chrome could be the one providing the backstop or these unexercised rights could be given to all shareholders who want even more shares on a pro rata basis or it could be a broker or investment banker that buys the excess shares.

Without a backstop, there is no guarantee that the amount that they want to raise will be raised.

I, for one, think this is the best plan they can put forward right now. I am not opposed to it but I'm not sure that I will participate in it either. I don't think the company has many options. I think this is their only option if they want to hold onto what they have and want to move forward. It is obvious to me that they have no JV partner at this time or they would not be doing this rights offering.

This is as objective a view as I can put forth. Nobody else seems to even want to talk about it, so I thought I would at least start the discussion.