Eclipx keeping this quiet, page-19

The issue isn’t what it’s worth for SGF ... but what they can afford to pay for it when it appears that their controlling shareholder wants to keep a 51%+ controlling interest.

Rough calc:
- controlling interest currently 56.8%
- can only issue ~10.2% more shares in SGF to ECX shareholders whilst maintaining controlling interest at 51%.
- 10.2% is only worth $100M at SGF price of $3.80 ... yet at $2.53 market cap of ECX is $800M
- Therefore, if SGF maintains its current controlling shareholder interest at 51% and doesn’t raise capital from its controlling interest ... they’ll have to borrow $700M to pay ECX shareholders AND take on all ECX debt.
- SGP currently has a market cap of just $980M, only $690M of assets offset by $440M of liabilities ... so finding $700M cash is a huge ask.

Under the the current indicative offer, I think SGF would find financing difficult. To sweeten the deal they’ll need their controlling shareholder on board to either ...
- Lend them the cash
- Agree and participate in a capital raising, or
- Agree to have their share diluted below 51%

Without this, SGF could potentially
- Manage to raise a huge amount of debt themselves or
- Sell off some parts of ECX to others (as per my suggestion re Grays)

How do you think SGF would fund a much higher offer? One of these options? Another option?

MMS or another large player with a stronger balance sheet than SGF seems more likely to me. However, I think its most likely that ECX just continues operating and growing its business and eventually the SP reflects its value (IMO $3 to $3.50 currently).