In asking the question I wasn't thinking of a specific example and upon a light google search tonight none immediately pop up.
I had a brief look into the Atlas Iron (AGO) recap done last year where 70% equity was offered in exchange for a partial reduction in one of the USD debt facilities. In that instance, 4 (out of the 71) lenders lodged substantial shareholding notices immediately post recap (10/5/16) and their 4 holdings equaled just over 49% out of the total 70% offered in the DFE.
The top 3 are certainly debt (or global credit) fund managers, however BCC is the only one that appears to offer a distinct distressed debt or special opportunities strategy that might align with what Anchorage does. I used to work for another fund manager that offered a similarly named strategy, however its appetite for these deals didn't ordinarily extend to taking equity and/or considering taking a business private. So there is one thing to invest in debt that trades for 20c in the dollar, and another thing to accept shares or even consider taking the business private for a number of years.
But getting back to why I asked the question and whether AGO is even worth a comparison.
In AGO, the total 71 lenders held 70% equity post recap. 90% is required for compulsory acquisition so not really an option there.
I also don't think Western or Marathon would be setup to take a business private. It just doesn't align with the core investment strategies they offer to clients.
In SGH, I don't profess to have any intimate knowledge of the lenders and what their core businesses are. I just know they collectively hold beyond the 90% threshold and to me begs the question, why not just take out the remaining 4%? What are the actual obstacles?
SPV's are used all the time in project finance. What is fundamentally different about a 90%+ cohort of the New Lenders from forming a new company that holds their collective equity interest in SGH, each having a Director on the SPV Board as befits their interest in the SPV, and then proceeding for a general compulsory acquisition? Maybe the courts would have a different view but what is fundamentally unfair about the arrangement?
Of course the view amongst the collective lenders would have to be a unified one. If they are all restricted from selling their shares for the next 3 years, what purpose does retaining a listing actually offer? Why not go private, cease the ongoing disclosure obligations, fix the business behind closed doors and then relist in 3+ years.
A separate but related thought, given only 4-5% of the shares are available within the free float post recap, I'm not even sure if that in and of itself causes any issues around the company's ongoing compliance with ASX rules. I would have thought something around 20% free float at minimum would be a requirement but I stand to be corrected I'm sure.
Anyway, all just speculation.
It's also worth having a look at the AGO price chart shortly after the recap shares were issued.
23/12/15 - Atlas signs debt restructure agreement ('market knows what is coming')
24/12/15 - closing price $0.019
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