RE: Net Operating Losses & Equity Trading Motions21 Dec 2022 08:54
Hello Hexam, good morning and thank you for sharing your views, very helpful
I suppose I rationalise this slightly differently but still get to the same answer, as recap what we appear to know to do is there may be a US listing and the UK is to be delisted (not clear about ROW).
For the second 50% of shares I would see as going to new equity (whether Cineplex, PE Fund, Hedge Fund, Investec, Goldman Sachs etc to hold for 2 years) and for the first 50% as you say is existing shareholders and creditors (taken here as the lenders not trade creditors). We could easily as you say ge5 diluted for 45% or more of that, leaving ALL existing shareholders with close to ānothingā
However I do not see that as a huge problem as this is where the takeover panel and tax losses come in, e.g is there going to be some buyout of minority shareholders and who in fact would be the minority shareholders beyond PIs in Nominee accounts. This would be where Mookys 20% and other holders >5% come into play.
The other obvious thing is even āifā we are diluted by 95% new co cannot have the tax losses ($500m-1bn) without a General Meeting being called and some form of shareholder circular. How much are these tax losses worth as bargaining chips?
My additional view is when the restructuring plan is eventually announced, confidence to the share will return. Also again, as have said before the docket announcing the EY tax work is key, where there are running various scenarios. One they excluded but there was a hint in this was āvaluationā as someone has to come up with a buy out figure if UK Plc is to be delisted, just as creditors have to put their cards on the table how many cents in the dollar they will forfeit
Hope that long answer helps and why I support eventually a share price in low double digits.
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