the cmi story, page-14

The problem as I see it is that in reality if the directors keep retaining cash and slowly buying up frustrated shareholders equity who can stop them. In reality they can do so - Oppression of minority shareholders requires an intent. If the intent is to have sufficient capital and be debt free than so be it its a logical pursuit. The move to write down a loan that appears to be servicing debt monthly is the first such move. Is it recoverable - well that is always interesting - the fact that its serviced does not in itself mean that you can recover the principal and the fact that the business hasn't taken up any of the early settlement discounts suggests that the principal may be at risk. However it would be a brave banker to start making provisions against a debt that is being serviced.

Then the next move is to have free capital to purchase an opportunity or to actually buy assets so that no free cash exists. Its possible they could even buy bonds or listed shares and become an investment holding company.

The directors dont have to get approval for remuneration however thats a high rate of tax to pay.

In reality you can sit there for a number of years and be denied a return. After all the greatest investor never pays a dividend.

Why would I want an asset that never pays me anything and may be under valued but the parties appear to want to separate me from value. A low ball offer does not look like they value shareholders does it. Some may say thats in the interests of the other class of shareholders - but that means that they are happy that someone loses.

Having looked at this closely they dont have facilities to pay $1.00 on the PC until they recover some or all of the loan. I am not sure as a ordinary holder I would like them to max out their Overdraft either. I think its a delicate balance but that the directors have the balance of power at present. Not sure that this isnt a high risk play to get involved in. Is ita value investment because how can you unlock the value.