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54.5¢ slater & gordon limited

I'm not exactly sure how it would all work, but if there was a...

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Fishinnick

22,671 Posts.

266

06/12/16

08:52

Post #: 21127259
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Originally posted by keith200 ↑

But why? Essentially you are saying Anchorage would buy all the debt, then convert to equity. This means they believe in the fundamentals of the company (hence "forgiving" all the debt, and trading for equity - with the view that the equity stake will outperform the debt piece - which they currently got for a 62% discount! This means that their equity share will have to more than double just to be on par with the debt's value..)

This makes no sense to me. If you believe in the fundamentals of the company, just buy equity on market now ..?

I think a more likely path is that they see that the debt will be repaid - but not as per the original loan agreement. But they are prepared to be a bit more flexible with the terms, but in exchange make 2.6x what they paid for the debt (100c/38c)

I've probably worded this badly, but hopefully you get the point !

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I'm not exactly sure how it would all work, but if there was a CR it would be for 100% value of loan not just 38% of the value imv.

SGH Price at posting: 31.5¢ Sentiment: Sell Disclosure: Not Held
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