Are you suggesting this was a good outcome for CNP shareholders?
If you read the Chairman's report from your link and The Australian article below, shareholders were lucky to be offered anything and were also encouraged by the Board to accept or else there would be nothing for them if they say no.
Will SGH shareholders say no to 5 cents per share?
Holders of 83 per cent of the senior debt have agreed to this proposal and have agreed to provide $100 million to be divided among CNP securityholders and other stakeholders to secure their approval.
If the proposal goes ahead, CNP securityholders will receive 5.03c a security, or $48.9m; holders of convertible bonds with a face value of $427m will be offered 5c in the dollar, or $21m; holders of hybrids with a face value of $1bn will be offered $20m; and $10m will be set aside for potential contingent creditors, which include class action litigants.
The CNP directors consider that if the proposal does not proceed it is likely CNP would be place in administration and that the senior lenders would then appoint a receiver and in that scenario the securityholders would not receive any value for their securities.
from p5 of the AR
The Senior Lenders have agreed that a sum of $100 million will be made available for the junior stakeholders, which the Directors believe is the only prospect of CNP delivering any value to the junior stakeholders.
In considering how to allocate the $100 million amongst junior stakeholders, the Board faced a difficult decision. No junior stakeholder will receive their allocated share of the $100 million unless all applicable approvals are obtained. With a finite amount to allocate, the expectations of all junior stakeholders are difficult to satisfy.
Ultimately the allocation to junior stakeholders, including 5 cents per security to CNP securityholders, represents what the CNP Board believes to be a fair allocation based on a consideration of all relevant factors and the need for all stakeholder groups to approve the transaction in order for any of them to receive their portion of the $100 million made available.
SGH Price at posting:
12.5¢ Sentiment: Sell Disclosure: Not Held
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