G/M are happy to lose their investment as they probably already worked this out with CBS. As mentioned previously, G/M vs CBS was only an deceptive illusion. G/M ordered Ten to be put into admin. There were no financial breaches and there was always sufficient funds available so there is no reason Ten was in admin other than G/M threatening directors personally should they run the business as they were paid to do.
G/M would have worked this all out well prior as it now appears the whole purpose of the shareholder guarantees was to obtain control of Tens future and G was the Chairman when it was implemented. No where in the disclosures that the guarantors could renege on their obligations prior to expiry but they did caused VA and inability for small shareholder to get any value back from their investment. It also means that Packer, Murdoch and Gordon would receive approx $12 million per annum from TEN even though they were never going to hand over any money. All up, in a little over 3 years they milked over $30million from Ten by having these guarantees in place. Easy money for them, a high cost burden on Ten to cover. I note that the facility was sold to shareholders on the basis the cost of establishing facility was reasonable but I have seen CCC- rated companies with lower repayments on a facility.
Unfortunately, we do need a war chest to have any chance of successfully challenging these guys and given the extreme loss in value of shares, most small holders could not be bothered with the amounts involved. (Ie. may end up paying more to get money back which defeats purpose.)
If only we had adequate disclosure regarding these guarantees we could have done things differently but only big shareholders like Lazard who sold down during april/may/june were in the know.
The last time I had shares in a company that went into VA, it appeared there was little hope. But the Administrator acted in the shareholders interest and obtained a 50% equity invester which meant I did not lose a cent as I was able to get my money back.
Korda, unfortunately was never intending to get a good outcome for the shareholders and I do not believe all other options were considered as they moved quickly to DOCA which left shareholders with no pants on. Every other DOCA I have seen presented in the past, I was amazed that with TEN, existing holders were totally left with NIL.
And what did Lazard know that made them suddenly sell down a 10% holding in a 3 month period prior to admin. That enabled them to retain $20 million in sales that were most likely bought by retail investors who know hold worthless shares. From memory, if you trade on the basis you know information that is not known to other investors it is called insider trading but they must be exempt.
I acknowledge your efforts on behalf of small shareholders but note it is a david vs golliath battle.
TEN Price at posting:
16.0¢ Sentiment: None Disclosure: Held
