SGH - Research, page-57

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rosencrantz

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28/07/17

17:44

Post #: 26148675
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Originally posted by rosencrantz ↑

"" I just know they collectively hold beyond the 90% threshold and to me begs the question, why not just take out the remaining 4%? What are the actual obstacles?""
I agree there is no legal obstacle to the subsequent formation of a bidding vehicle to bid for 100% of the company. However..........
First obstacle is ASIC. They will be a party to the scheme court proceedings ....whilst it's up to the present shareholders to vote thru their huge dilution to 4% ..ASIC may trot out a public policy argument against the scheme..especially if an argument can be put that the other guys are warehousing their SGH shares for Anchorage
Second obstacle is the judge's attitude to the incoming "new lenders " as distinct from the old lenders being DeutscheBank and Merrill Lynch . It is possible that ASIC or a shareholder or DB or Merrills could argue that the old lenders are in a "separate"class of creditor and must be the subject of separate scheme consideration.
Third obstacle is DB and Merrills . Assuming the court approves their SGH share allotment for sacrificing their original security interest , they collectively may hold more than 6% equity in Slater & Gordon post scheme.
Fourth obstacle is the announced "management incentive plan"- in formation [ a work in progress ((( nasty word I know))) and ostensibly allowing management to own up to 10% equity in the company.
Obstacles 4 and 3 are the more insistent in my estimation.
Incidentally I've sold my SGH position for a small profit...so this could be be my most objective opinion on this tortured topic

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just had a re-read of that "management incentive plan" .
these words.....""it will allow for the economic equivalent of 10% of the Company’s fully diluted share capital to be available to beneficiaries of the plan over time.""
must invite a please explain from ASIC .
maybe the smart guys - the Leon Zwiers and Michael Charltons- are thinking that the ''economic equivalent "" to direct ownership of shares will pass muster with the authorities. Maybe it wont.

SGH Price at posting: 8.5¢ Sentiment: None Disclosure: Not Held
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