RE: Suzy dilly LinkedIn post10 Mar 2020 10:48
Contd part 3
If this threat of insolvency could be removed, perhaps the vote would more fairly reflect the will of shareholders. For example, perhaps the company could promise (in a legally binding intention) not to act on the result of the resolutions prior to the second GM. This would prevent the second GM being flooded by votes from new shareholders who only see the discounts and the profits rather than the pain of long term holders; it would also enable the company to be ready to immediately raise finance after the second GM (regardless of which directors are in charge) without the delay caused by having to request headroom.
Or perhaps a third party could effectively underwrite the resolutions, by publicly offering to carry out a share placing after the first GM, but promising not vote in the second, thus allowing alleviation of the working capital stress, but not influencing the result of the second GM. Although that does open the door for the potentially outgoing directors to spend the cash raised prior to the overhead reductions; unless such cash could be likewise delayed until after the second GM.
So perhaps this time, the same questions may be asked but with a different result – but I believe that that is only if the conditions of the experiment are sufficiently changed prior to polling day. Otherwise it can only be assumed that the management are performing replicate experiments on their shareholders, just to see whether the result of the experiment is reproducible.
*Disclosure: The author is a company director of a subsidiary of Valirx (ValiSeek), but has had no resources in or around Valirx plc since 21st February 2020. The opinions and analysis in this article contain no inside information and reflect my personal views only; they do not represent the views of any other person or corporate body.
I suppose this sums it all up..!
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