Are Austroid a shareholder prior to buying Alita or just the main creditor? If just a creditor, they only get back their investment so the share price has no relevance to them or other creditors who accepted a reduced payout originally.
It matters to say Galaxy as they invested directly in A40 and were the main creditor but their bid for A40 was not accepted, instead the liquidators opted for a rather hasty settlement for a Chinese backed company, who then paid back Galaxy their debt and paid 100% to all creditors owed less than $10,000 and screwed larger creditors. It'll be interesting to see whether the other larger creditors who got a few cents in the dollar are also entitled to be reimbursed before shareholders ever see a cent. I'd imagine that with the deal falling over, all creditors will now be paid in full and maybe interested added also.
As shareholders, we are part owners of a broke company with little to no protection, despite a liquidator supposedly meant to seek the best offer available. They claim there was only 1 legitimate bid for Alita, so MIN can basically get it for a song and the liquidator can still claim it was the best price possible at the time.
They were at pains to spell out how shareholders were entitled to zero return under the Austeroid deal, so anything above zero will be claimed as a win for shareholders imo.
Not much protection exists for shareholders, though I can remember two instances where the ASX listed companies were able to keep trading after losing their main asset. Reed Resources' subsidiary being put into liquidation for owing $29m against the Bluebird mine. MLX bought the huge plant and associated infrastructure, along with 3.5moz of gold for $6m. They then spun it out into their new ipo called Westgold along with their other gold assets.
There were a few unhappy businesses around Meeka who received only a small percentage of the money owed to them, whilst Reed Resources went on to rebadge itself as NMT and develop their lithium project.
FFX also look like disposing of the Morrilla gold mine for a nominal amount and still carry on trading as the mine is held in a subsidiary company.
Then there's AJM which PLS just acquired their project and paid enough for AJM to extinguish the debt owed and eventually carry on trading.
So what's different here? Did they hold the project directly? Or is the project held by Tawana, with A40 a subsidiary? And of course, if MIN are to pay enough to cover all creditors then why isn't A40 still able to relist on the ASX providing they meet the capital structure, or has the passage of time now been too long and to relist means essentially starting an ipo process from scratch again, therefore the company has no adequate project left to relist with?
Anyone out there know the finer details here?
A40 Price at posting:
8.2¢ Sentiment: None Disclosure: Held
