You are offered an opportunity a property developer needs to borrow funds quickly to build real estate in UAE He is willing to double your money and pay you back in around 3 months. He is offering collateral of uncut diamonds, but the collateral will remain in the vault of a local jeweler. You don’t believe that you will get your money back in 3 months but think that the developer will possibly pay you back in 12 months and most likely within 36 months. You are trying to decide if the return is worth the risk. You estimate the following probabilities

1) £100,000 paid back in 12 months probability 20%

2)£100,000 paid back in 24 months probability 20%

3)£100,000 paid back in 36 months probability 20%

4)diamond worth £250,000 in 48 months probability 20%

5) you receive no money or diamond probability of 20%

You offer £50,000 and will hope to receive £100,000 at payoff

QUESTION: 

After repaying the balance of your borrowings, to your great surprise 100% of the 100,000 outstanding shares of the company that owns the uncut diamonds, Diamond plc is transferred to your name. The diamonds need to be cut and polished. The cutting will cost around £55,000 and the polishing around £35,000. The investment bank organizing the rights offer will charge diamond £10,000 in fees. You do not have any cash left to pay for the above expenses or buy additional shares via a rights offering. You want to maintain majority control (>50%) of shares outstanding and raise at least £25,000 from selling all of your rights, is this possible?