negative net asset position, page-93

I guess if the banks get 90% of the company they don't really care too much where the current share price is at. At current price of 32.5 cents the mkt cap is only $121 million, which given the -ve net worth is basically option value on the company selling assets for more than debt and surviving.

Now if the banks forgive some of their debt they are going to reduce that -ve net worth (making the company worth more), I guess the question is, for each dollar of debt exchanged for equity, how much more value does that give the company? It also will have a theta value too, ie the more debt exchanged the more the equity is worth up to the point where 100% of the debt is exchanged.

Presumably there is a balance point where enough debt is exchanged to make survival highly likely but leaves the banks with plenty of debt that will be paying interest. Not sure what that point is - 20% 30% 50%? How much did Centro exchange? and was that enough for them?

Bit of rambling I know but its not a simple equation and the banks are 100% in charge and looking after their own interests and theirs alone. Current equity will be worth more if the company survives (obviously) but worth less because f the dilution but how much less depends on how much debt is exchanged and at what % of the company.

I wouldn't be surprised though if the SP is still around the 25-35 range as once the company has a clear shot of survival the market cap should be quite a bit higher so even dilution would mean the price should stay around current levels.