The word guarantee appears 7 times in the prospectus. Each time...

The word guarantee appears 7 times in the prospectus. Each time it is preceded by the word "no". But even if EWI/SE guaranteed the whole shooting match, which he clearly has not, he would be on the hook for $54m. In an administration this would be an asset due from SE, and the administrator would it set off against the debts due to SE - in fact such a set off is compulsory in most jurisdictions. As the COMI (Centre of Main interests) is in HK , the administration would be in HK not Australia.

The new directors (whom I rate) have, as Ifandwhen pointed out, been in this name for a very long time - over 20 years in one case. This is not a "value play" as opposed to a salvage operation. I also note the fnds controlled by new directors probably did not not participate in the raise. I could be wrong, but if there is $4m of fresh non-SE money (circa 7.4% of the non-SE offer) and these interests own 70% of the non-SE interests, then it is probable they passed as well.

Now consider the instito interest in this case - most funds will immediately pass because the company has no income and operates in EM and has demonstrably failed to navigate the EM politics. That is the end of the road for most funds unless they have a very large appetite for risk. The risk is not as you might think just investment risk but is "product risk". An investment of this sort is wholly inappropriate for savings and/or pensions. So that is the bulk of Australian/NZ money ruled out. So we look to the specialist "special sits" guys (which is the sphere in which I work) and we consider what will get them over the line. It will be the possibility of short term realisations to derisk the money going in, and then possibly a longer term realisation to make the profit. The success of this strategy completely depends on the discount to NTA that EWC has to accept for each project. If these projects are in fact viable, the Special Sits guys will be looking to introduce buyers for the projects. These buyers may be related parties creating another potential pocket for profit. I do not think any cash buyer would have mush push back from the shareholders at any reasonable offer. So the shareholders will approve the deal. Difficulty is that the risk of it all going wrong increases as layers of contingency are added.

As those projects are realised SE will be looking to ensure Slipform gets paid. As Slipform is paid in priority to the shareholders, the "Special Sits" guys will also be looking to tax the quantum of the debt to be paid away in priority to their interest. So there will be conflict there as well.

Right now everyone involved, and anyone casting their eye over the $30m shortfall (circa 20% of EWC) will be thinking about these lines, and will be thinking about a mechanism to maximise their share.

Hence an administration - as opposed to a liquidation - but they may amount to the same thing in the end.