I see an easier way for Anchorage.. they can make the case to the Federal Court that ordinary shareholders have no economic interest in SGH because the book value of equity is negative.
Why seek shareholder approval when they don't have to. I've referenced a few examples of this earlier today, so there is a precedent for it.
The main stick points are:
1) SGH requires working capital - I believe the new lenders will provide this in pro-rata to their respective debt holding size.
2) Protect against CA claim - Some here (and the AFR apparently) have foreshadowed a timely settlement from the insurance policy. With this out of the way, there would presumably be less concern to exchange secured debt for equity.
3) Retaining staff - Offer them a new incentive plan that alleviates some of the pain that will come from near full dilution.
SGH Price at posting:
12.5¢ Sentiment: Sell Disclosure: Not Held
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