Ann: Recapitalisation Agreement, page-100

I don't think that MBN is all that good an example. Yes, they did this, but then within a further 12 months of doing so, they were back under external administration. For a very brief period in early 2014, the SP spiked to the high 20c before falling back to sub 5c for much of 2014. It then spiked on a secondary occasion to 12+c by mid 2015 before then falling away again. By Sep15, they were back in Administration, and then by Oct15, RCM's had been appointed.

If you either require or want a restructure, you need it to be successful. Taking away 95% of the existing shares (spread throughout) would likely render >90% of the shareholding base of 20,300 shareholders @AR16) holding onto unmarketable parcels, absent the SP jumping rapidly towards a $1 or more. May be that's the plan, but it won't then help with any future capital management initiatives. Issuing shares, but then later consolidating them and possibly then matching them with either options on a consolidated basis, an associated SPP, or a loyalty bonus, etc, could well adjust sentiment the other way. But absent doing so, sentiment resulting from taking away 95% of the shares held (and not increasing the overall number of shares on issue) is likely to alienate, not appease. It happened with MBN, but then again, MBN has turned out to be a repeating failure.

Equally, Justice Black's argument of there being "no unfair prejudice" in these circumstances (when, for example, measured against the liquidation option) is interesting except that it did not subsequently address the issue of what happens to the "no unfair prejudiced" shareholder when, subsequent to the recapitalisation occurring, and being told that, as a shareholder, they hold an unmarketable share parcel, and that they either have to (A) sell out, or (B) top-up to a marketable parcel size, or (C) have the company forcibly sell their unmarketable parcel from under them, I doubt that the "no unfair prejudice" argument has been fully considered through. The moment that you either have to sell your remaining shares, or are forced to buy new shares in order to keep intact your remaining shares, the "no unfair prejudice" ruling takes on an altogether different meaning. As it was, back in 2013 (last reporting period preceding the MBN recapitalisation), MBN had 2858 shareholders, so upwards of 14% of the equivalent shareholder base that SGH had at AR16. 29% of the MBN shareholding base at the time held >10,000 shares, compared to 21% for SGH. So, similar in some ways, but quite unalike in other words.