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Another point - I thought it was a £ 800 million haircut in the debt not £ 1.5 billion? Also don't forget all the interest they have received over the years (£200 million plus for 6-7 years at least) plus remember some of these lenders acquired the debt at a share discount so will not be so out of pocket as other lenders. Surely you are not on the BoD side in this mess and cannot blame shareholders looking into this matter to ensure another company doesnt go down the same route! It was only 2-3 years ago that the company asked shareholders for funds via a rights issue and between then and now the lenders probably did very well in interest and now have the whole company to boot!
I'm keeping an interest as an ex-holder - perhaps in hindsight the BoD should have been clearer that the "greatest extent" probably meant zlitch for shareholders - it appears the lenders held all the cards doesn't it? If HSG manage to appoint their 10 members as directors - the positive will be that they can do a lot of digging to ascertain the TRUE facts of this sorry affair
KNIGELK - the clue is in the words "to the greatest extent possible" ......... You're getting what the law entitles you to. How can you not understand that?
Piler - lenders have done this before (HMV, Mouchel, Connaught, etc, etc) and the law says they owe shareholders nothing. Put it the other way around - if the business was going great guns and shareholders stood to make super profits would you say to the lenders "tell you what as well as paying you back your £2.3 billion here's another £24 million for free"? No, didn't think so. Remember the lenders have lost over one and a half billion on this. My money is on the HSG directors never getting appointed. The lenders can't afford to have out of the money stakeholders dictating their outcome. As harsh as this seems it is reality backed by the law and the directors have to abide by the law in the face of this scrutiny. Instead of complaining about corporate misdoings shareholders need to take a reality pill. This company has gone the same way as ALL of its European peers. Doesn't that tell you something about the business model and it's suitability to high leverage or all they all guilty of dirty deeds as well? Owners of an insolvent company have few rights in law. And that's what you are I'm afraid.
A six year old article on something that has not transpired into reality isn't gong to bother anyone. Do you think that you can convince a decent law firm to take the case on on a contingent fee basis?
http://www.thelawyer.com/uk-directors-should-beware-the-new-companies-act/126773.article Interestingly look down the left hand column of this article HSF are mentioned, also the article below it re Collyer Bristow is quite revealing too.
Sorry but I back this group 100% (although i did sell before suspension)... If you get a message from the BoD stating that ALL stakeholders will be protected to the greatest extent possible - then one of the stakeholders - the owners - end up with nothing - I suggest they have been let down very badly. The lenders have been greedy and not wanted the shareholders to even have a tiny equity in the new Hibu because they do not want the company to remain listed. If they had offered a nominal sum (say 1p at a cost of £24 million) all this hassle would have been a lot less. They have written off £800 million and cannot find a few million to offer shareholders as a token payment which is probably equal to the cost of the new advertising campaign...
Very interesting article!
Shareholders - as OWNERS of the company - will get to find out who the lenders were / are won't they? Only, if a CEO wilfully oversees / orchestrates / sanctions, etc., the surreptitious (as in silent - keeping shareholders in the dark) siphoning off of shareholders' hard earned into shadowy 'satellite' outfits with a view to placing the remaining, threadbare shell of the original mother company into admin. whilst said satellite outfits are taken private under the umbrella of a holding company then that's theft isn't it? The worse sort. The spineless, white collar variety, that, being so difficult to prove, more often than not goes unpunished and, as a result, often masquerades as legitimate business activity. "There are plenty of precedents for this" You ain't kidding - you need look no further than a former company of which MP was CEO for an example of one IF RUMOURS / SUSPICIONS ARE TRUE - now that's my disclaimer, so no accusations of libel please (or is it slander if the medium is electronic?). Wonder if the same crew he used then really have advised hibu? Anyway, as wongini asserts, there'd surely be one hell of a lot of -ve PR associated with any lender that was so intransigent as to leave shareholders with nothing (a relatively insignificant fraction of hibu's revenue even now could have afforded an offering of a couple of pence or so) under circumstances as 'cloudy' as these. Bring on the EGM!
This is a little light reading for Mr. Wigley during his Journey (in his chauffeur driven car) on the way to the EGM on the 4th of December http://www.thelawyer.com/uk-directors-should-beware-the-new-companies-act/126773.article
Wongini - it's not a sham. Shareholders invested in a company with massive debts and a declining business model (and arguably poor management). When this happens this is often the outcome (ask Guy Hands). There is a clear rationale for the lenders taking over and being in charge of their own destiny and there is no requirement for shareholders to receive anything. If you've a cogent argument as to why things should be different then I'm all ears. I don't think the lenders will be fearful of admin. It should be isolated to the holding company and not the companies that customers and suppliers actually trade with. There are plenty of precedents for this where the damage to the business is negligible. Customers and suppliers just don't feel as passionately about this as you do. Shareholders to Mouchel thought admin would prove a death knell but I hear it is doing very well under lender ownership.
Shareholders already wont get a cent if they let the current BOD and lender's carry on this sham. That's why things must change. There will be no positive outlook for the lenders either as customers will not want to touch a company in admin with a deserved reputation for screwing people out of money. If this happens I predict no amount of PR will save HIBU. Google 'HIBU' and any negative adjective, then imagine this bad press times 1000. The lenders are truly shortsighted and need to speak with their image consultant. At the very least they will need to rebrand again if this debacle carries on.
They'll put it into admin because they want to get the restructuring completed. The appointed insolvency practitioner will investigate as I've said but if you want to fund something separate then that's your prerogative. I would just caution anyone who thinks this will change the financial outcome for shareholders. You won't get a cent unless you can sue the BoD personally. Which, if they've done wrong, I hope you do.
You in some part answer your own question. One of the main objectives is to uncover the truth and if evidence of wrong doing is uncovered as is believed, those responsible will be brought to account. If the BOD had nothing to hide, why would they refuse to talk with HSG and why would they threaten to put the company into admin if the EGM resolutions are passed?
Firstly, I come here out of curiosity. I'm interested in why people would invest in this pup when it was clearly heading towards insolvency like all its European peers. I'm also interested why shareholders think there is some sort of special case here and somehow they should be compensated for their losses when basic research would have mitigated or avoided them. It's a public forum so I presume a reasonable place to explore these points. Secondly, as I have already posted the shares in the US business are pledged to the lenders as security for the debt. This means that the BoD would need the lenders approval for any sale and all the proceeds of any sale would go to the lenders. The price you suggest would give lenders roughly a 50% recovery on their par debt when that debt is trading at about half that level. Therefore I'm willing to bet that there was no real prospect of a sale at that price. As for Polaroid, I have no idea as I don think it is relevant to what happens to Hibu. If you have evidence that the BoD of either company have done wrong then sue them. Still waiting for someone to give a credible explanation of what the HSG expects to achieve by getting directors appointed to a massively insolvent company in a legal environment where shareholders have no right to any control over the outcome.
http://t.capecodonline.com/apps/pbcs.dll/article?AID=/20020726/NEWS01/307269958&cid=sitesearch&template=tabletart Morgan claims that it was unnecessary for Polaroid to file for bankruptcy in the first place. Once in bankruptcy, he claims, the company undervalued assets by $1 billion to knock shareholders out of the picture. That sounds familiar!!!!
Play spot the difference between Polaroid and Hibu and some would argue that events have been in the making for some time and that those purchasing shares were unwittingly duped in a false market whilst those in the know made a killing on shorting the shares, picking up debt/company assets for next to nothing, receiving millions in consultancy fees, wages and cash bonuses. If HSG cannot stop the theft of its assets, compensation must be paid IMO. http://rense.com/general27/therapeofpolaroid.htm
Whilst your posts are often well considered and insightful for those with a vested interest I would like to know what brings you to this message board if you are not a shareholder and what your take is on the BOD alleged rejection of a $1.8b offer for the US business earlier this year?
Thanks Piler. I think the current BoD concluded back in the summer (far too late in my opinion) that the company/group had no prospect of being able to repay or refinance the debt as it fell due and were essentially forced to accelerate talks with the lenders. I think this is actually one of the least incompetent things they have done. During those discussions the lenders will have made it clear that given the current and future valuations of the business there is no prospect of equity value and they expect the directors to do their duty and protect the value of the creditors. The lenders are offering to buy the business for the value of their debt and the directors will have concluded that no one else would be prepared to offer a better price therefore the directors have no alternative but to sell (or hand over) to the lenders. As I said I think the directors have been poor in their strategy in recent years but in his final episode they are being properly advised. As for putting "the whole group into admin" I don't think that will be the case. They should be able to do this at a holding company into admin and then the administrator will sell the businesses beneath to a lender owned SPV. The fact this hasn't happened yet suggests to me that the preparation hadn't been done quickly enough (there are many tax and structuring issues to work around in this kind of thing) but there will generally be a way to get it done and I'd fully expect it to happen before the 4th. The BoD simply have no alternative. If you want answers about the conduct of BoD then insolvency will require the IP to prepare a report on the conduct of directors including conflicts of interest, previous decisions made, etc and that may enlighten you. You can also launch your own law suit against the directors if you so wish. I'm sure the prospective HSG directors have a plan don't they?
In fairness to BP, if I recall correctly, he did state that if the BOD have acted illegally he hopes they lose their houses or words to that effect, but his question simply can't be answered at this stage because we' don't know what was discussed during the - ahem - restructuring talks (and the BOD seem to be playing silly bug*ers re. granting access to any minutes of them that were taken). We don't know whether lenders would be amenable, following major changes to the constitution of the BOD, to eleventh hour amendments to what has been proposed, and I fail to see how it would be in their (the lenders') interests to put the whole group into admin. (and the current BOD surely couldn't do this autonomously). Oh 'ello, what's this - David Booowie in a TV ad. on Ch. 4 sat at a piano next to some lovely looking girly?!
All that rant and you haven't answered the question. I am certainly not pro the BoD and have stated that I think they have been incompetent many times on here. I also warned that this company would end up here in August 2012. Did you listen? Did you? Nooooo to busy with your head in the sand not doing your own research. So, I still appeal for someone, anyone to put up a credible and plausible answer to the question. In light of the corporate and insolvency laws in this country what will the HSG directors ACTUALLY achieve. I have no other reason to ask this question than an interest in the broad topic and a strong belief that people are joining te HSG in the belief that it will make a difference. Maybe you should get Guy Hands to talk you through his EMI experience and explain why it won't.
As ever I could not agree more, you are absolutely spot on, what new directors are going to achieve? We should let these proven crooks and "mafia in suits" clowns run with their plans and set a precedent for the city. What a load of bullocks. Wigley and Co are running scared because their future is at stake. Once they are proven guilty no one will want them, I hope their families members disown them too. Let me tell you, one BoD member is currently director of over 10 companies and once his true face is shown to they city he is going to loose all of his directorships and he is probably making millions of pounds every year from these businesses. He is scared to death and therefore, BoD issuing administration threats. Do they think by calling admin everything will go away, NO CHANCE, shareholders lost the money only but those directors involved in this scam are likely to loose a lot more. BP, you seem very close to BoD, please whisper a message into their ears.... "Truth is about to prevail so be scared, be very very scared". Now to tell you what new BoD will achieve, a less experienced, less educated but honest director is much better than more educated and experienced crook. I have every reason to not to trust current BoD what excuse you have to keep them in the job and to post messages here against HSG and proposed directors. Logically, only BoD or their allies would write against HSG and would urge shareholders to not to appoint new directors. So, who are you exactly or what is you excuse?
Interestingly Mr Bob's name is listed as a Director in Dubai up to 31/12/2008............... I wonder if Looney knows him http://www.difc.ae/merrill-lynch-international
"Quite simply a better job than the old directors." doesn't answer the question. WHAT will they ACTUALLY do? If they don't change the course of the Financial Restructuiring then they won't be part of the future of Hibu. The running of the business will be down to the new shareholders and it is up to them to operationally restructure the business. I don't think they'll be too worried about this as they have run plenty of non-banking businesses between them. Come on, surely someone can do a better job than this (one of the prospective directors maybe - there must be one on here?). What are you ACTUALLY going to do that is going to make a difference because I'm willing to bet that it amounts to nothing.
Post rec - you are quite right. The current directors simply have to go - it's about sentiment and it's dire at the moment