Sounds like a great win for Anchorage, Litteljohn and perhaps employees assuming they had some equity in the business. However, it means absolutely nothing for the shareholders who existed at the time Anchorage et al bought in, as they were bought out in their entirety. See as evidence of this:
The company has
new ownership in place. Equity investors include Anchorage Capital Group LLC, Littlejohn & Co. LLC, Tennenbaum Capital Partners LLC and Farallon Capital Management LLC
https://www.estormwater.com/contech-announces-new-ownership-structure-corporate-name-change
Contec Holdings Ltd.’s Chapter 11 Restructuring
http://www.moelis.com/transactions/product-offering/recapitalization-restructuring/page/9/
This one is even worse as I hadn't realized that Contech was in Chapter 11 - if you don't know what that is, go research it, but suffice to say without Anchorage etc Contech likely would be bankrupt right now. Sound familiar?
says Contech CEO Ron Keating. "We look forward to working with [
our new owners] as we expand Contech's leading global market position..."
http://www.concreteproducts.com/new...e-change-reposition-contech.html#.WTUCyLdf2Uk
Anchorage Capital Group,
Littlejohn & Company,
Tennenbaum Capital Partners and
Farallon Capital Management have
acquired Contech Engineered Solutions from
Goldman Sachs Mezzanine Partners. Contech, a provider of engineering and site services for the civil engineering industry, has secured a $125 million credit facility from
Wells Fargo and a revolving credit loan of up to $100 million. Goldman Sachs led a recapitalization of the company in November 2010 and took over majority ownership from
Apax Partners.
https://pitchbook.com/newsletter/contech-switches-pe-backing
I think you get the idea. In no way, shape or form did then-current shareholders / owners participate in the rewards of Anchorage's sale of Conech in 2016 because they were no longer owners.
In SGH's case, it is not in administration, but only because Anchorage is providing it with working capital and not calling in the debts. Why? In my opinion it is because they can make exponentially more money by recapitalizing the business and keeping it listed. Otherwise, they have to do one of two things: 1) run the business down and try to sell high-performing parts to competitors or 2) turn the business around and try to relist in the future, which carries high risk, particularly due to the market's skepticism of private equity IPOs (see Dick Smith etc).
How much will the recapitalization be? No one knows, but it is going to be several hundred million in order to reduce the debt to a manageable pile. Say $300m, that gives them 90% ownership.
As for the positive signs: hiring - this is mickey mouse stuff. If they were hiring 40 people into NIHL then I would consider it a positive sign perhaps, unless it meant they were just replacing an entire office. People leave, companies hire employees, it happens. It is not news.
Lawsuit against WTG: great once the money comes in, but if you think it is going to be $1b you are dreaming. Due to a number of factors: risk, time value of money, limits of insurance if any and business assets, NO lawsuits of this nature settle for 100 cents in the dollar. Also, that case is not going to settle in the next 3-6 months, which I would think is the timeframe for the DFE. Once the DFE has occurred, guess who gets the lion's share of any spoils? It sure isn't anyone who is currently invested.
Class actions (Spotless, VW etc): These are not no-win, no-fee so whilst it is good that SGH is winning work, all this means is that SGH will earn fees and the funders (IMF etc) will collect a percentage of the settlement, which is where the real money is.
Apologies for the long-winded post, but I have followed the stock for a long time and just got fed up with the ridiculous comments.
