Are we so sure AIO (Anchorage) are so keen to do this deal? They did a nice recapitalisation deal with $750m face value, in a company that is now announcing healthy profits and well able to service that debt, as it has in the past. They got that debt at a nice 30 cents on the dollar from the big banks.
AIO took the equity as part of the deal at far higher levels than this. Are you so sure they are willing to sell out? There has been plenty of talk in the past of SGH failing its debt covenants in the past. They never actually did.
You appear to base your opinion on a January 2023 article that is a but of a joke (it refers to 2021 finances).
(the law society should perhaps stick to the law and leave accounting and finance to others)
Its been shaky, but the company returning to profitability and positive net cash flow. If trends continue, it can pay its debt burden and AIO would have little reason to wish to lock in a massive hit on its equity holdings in SGH. This is the problem with major creditors controlling majority shareholdings. They hold unfair information advantages over other shareholders in the true health of the company.
The company has to get 50.1% of shares for it to proceed. If AIO do NOT agree to the deal, no way the deal goes through and SGH begins a nice price spiral on raised deal price murmerings. If I was AIO, I'd be sitting tight unless they know of some real issues that contradict recent debt repayment ability improvements by SGH....
SGH Price at posting:
60.0¢ Sentiment: Hold Disclosure: Held
