No - it suggest that for every $50million in debt SGH will effectively give the banks $100million in equity.
That would suggest anything up to $1.6billion in equity which at worst adds another 6billion pieces of paper to the registry
That would leave current shareholders owning 5.2% of the company.
Of course this is worst case scenario according to the article - but either way shocking shocking dilution.
HOWEVER - If you rid the company of debt and its restructure produces strong income growth then the current share price is not all that bad as it would give the re-capitalised entity a market cap of more than $1.5billion.
So if you think based of MF's numbers that a $1.5billion market cap is justified then you will think 27cents is fair value
No point guessing - lets wait for the facts.
SGH Price at posting:
27.5¢ Sentiment: Sell Disclosure: Not Held
