"The Singapore plant could not be sold or recapitalised.
Unfortunately, Power Knight has pulled the plug on the Singapore operation and put it into receivership. Who knows, they will probably end up buying it on the cheap.
Nothing left but the shell! I thought I was investing in a biodiesel company but it turns out it was just a bunch of unsecured loans and worthless equity (NFPL, NFAL). I now understand more about "down side risks" when a company gets into trouble and creditors look for life rafts.
NRG Capital will buy the shell (if creditors and shareholders approve) and allow existing shareholders 46.8% of the issued share capital. They'll then do a capital raising (non renouncable - 1 for every 2 existing shares) at $0.0025.
So effectively just about all value has been lost, but they have us on the mailing list for a new business (possible hydrogen). I look forward to seeing the prospectus."
NRG propose to pay off creditors in return for the issue of new shares (dilution to existing shareholders). They will do a non renounceable capital raising (1 for 2) which will result in further dilution if you don't participate.
In the absence of prospectus information, the value of the shares would be approx the value of the capital raising divided by the diluted shares on issue.
Prior to the raising, existing shareholders will own approx 50% of the shell.
The capital raising is fully underwritten. If you don't participate you lose a further 33%.
So one approximation of the value of a share might be 0.0025/2 * (2/3) = 0.0025/3 (assuming you don't participate in the raising. Say $800 if you have a million shares.
The creditors get to choose which vote is put to shareholders. Shareholders get to choose whether they accept. Creditors must choose a scenario that shareholders are likely to approve. If shareholders say no, creditors lose out.
Surandy70 - You are correct. For most of us there is no value left. I was just trying to point out that for the top 20 or so shareholders, a lot of a little still adds up to something.
I am interested in what the shell will be used for. I'll look at any prospectus and evaluate what is on offer on its merrits.
BGC Price at posting:
3.9¢ Sentiment: None Disclosure: Held
