The EGM for SMG is coming up, and it's important to carefully evaluate the resolutions on the table. With the recent share consolidation now complete and the company rebranded, these decisions will shape the trajectory of SMG for years to come. Here's a breakdown of the key resolutions and my thoughts as a long-time observer and shareholder.
Debt Conversions and Placements (Resolutions 1-14)
Several resolutions propose converting director loans and related-party debts into shares, alongside significant new share placements. On the surface, this strategy appears to stabilise the balance sheet, but the pricing - $0.015 per share - represents a deep discount to past market values. This raises concerns about fairness to existing shareholders.
The directors’ financial contributions, such as the $250,000 commitments from Michael Povey and Kevin Lynn, are commendable. However, these commitments are structured in a way that consolidates their control post-conversion. The sheer scale of the proposed placement (Resolution 13, 533 million shares) could dilute minority shareholder positions to a negligible level.
Governance Concerns
The current leadership team has historical ties to underperforming restructuring strategies. Michael Povey’s involvement in past ventures like Silvermines and Surefire Resources, which both underwent share consolidations with poor long-term outcomes, serves as a cautionary tale. As shareholders, we must ask whether repeating these patterns is in our best interest.
Suggested Voting Directions
Resolutions 1-2 (Debt Conversion): Support. Reduces cash strain and stabilises finances, though not without dilution risks.
Resolutions 3-5 (Director Loans): Oppose. While these arrangements bolster short-term liquidity, they are overly favourable to insiders.
Resolution 13 (Major Placement): Oppose. This massive issuance will dilute existing holdings and disproportionately benefit certain parties.
Other resolutions (6-12): Scrutinise closely, especially those linked to advisor securities. Vote cautiously based on alignment with broader shareholder interests.
Moving Forward
This EGM is a defining moment for SMG. The consolidation has already reset the share base, but we have the power to influence how this company proceeds. While restructuring is sometimes necessary, it must be balanced against the need to protect shareholder value. Let’s ensure that our collective voice is heard.
Remember, voting closes soon, and every vote counts. If you haven’t yet cast your ballot, consider doing so now. SMG’s future depends on an engaged and informed shareholder base.
Working together ensures that SMG moves forward in a way that benefits all shareholders, not just a select few.
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