Greater than 90% control of the issued capital ensure they can buy up the remaining issued shares. 75% is a Scheme of Arrangement threshold so for a Hedge Fund to ensure the lowest possible risk they would seek greater than 90% equity after a conversion, and that they have done.
Why 96% instead of 95% or even 90%+1 share? That will be buried deep in the IRR they will have done and it sets them up for the lion share of any windfall from the UK debacle and possibly reduces any potential fallout from inbound litigation actions.
I must admit I thought 96% holding (by the way this doesn't equal a 96% conversion of debt) was high but I now get what they are up to and that's why they are a hedge fund and I am not.
SGH Price at posting:
8.1¢ Sentiment: None Disclosure: Not Held
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