Ann: Quarterly Activities Report & Appendix 4C - 31.12.2020, page-6

I don’t like the related party loan but in practice it would be difficult for SBANG to gain economic control this way (in any case they already have negative control of the company given their large 30% shareholding and board rep ).

If M8S draws down on the loan and subsequently defaults they will be able to raise the capital easily enough to cure the default and pay out the related party loan. For arguments sake though let’s say they don’t. SBANG then appoints a receiver (eg Korda Mentha) who then runs a sale process for the M8 assets. SBANG will try and control the process through their secured debt position but there would likely be other bidders eg CWY, BIN (or the private consortium if the t/o goes through) and potentially some private players eg JJ Richards. Everyone loves a bargain.

I don’t think SBANG would risk this play, as they also have a fair chunk of equity in M8 that they would dust if another player outbid them (assuming there is some equity val it’ll likely be lower than the current EV/SBANG’s entry). Thais are also quite conservative by nature.

Still, SBANG and Star Universal’s combined ~45% stake will limit any corporate activity IMO. My thesis here is all around Gingin. If they can get that up-and-running we should see a decent re-rate IMO.