Bouleversee wrote:There are several things about this which I don't understand: 1) What would that 5% have been worth in terms of the price of the existing shares held? ( After Lonmin did a similar exercise, the original shares were worth virtually nothing after massive dilution and the new shares also went down). 2) If the directors weren't going to take up their entitlement to the new shares, how did they expect other shareholders to do so and are their existing shares wiped out as mine are or have they negotiated a deal whereby they get a load of shares in the new company which will emerge from the pre-pack? 3) How come they keep their jobs when it's their bungling which has brought the company to this pass? 4)Why did we not get a chance to vote on Coltrane's proposal which would have given shareholders a better deal? 5) Why do shareholders count for nothing and it's only creditors and staff and their pensions which are taken care of? What about the pensions of the shareholders?
It's a mug's game but what alternative is there these days?
(edited 15/5 to correct quote structure. Raptor.)
I'll start off by saying I didn't hold and have not held Interserve in the past, but did hold CLLN when it went to the wall, so I feel for presnt Interserve holders.
I'm assuming that if shareholder were to get 5% of Interserve and banks and bond holders 95% then theoretically the share holders will have 5% of the new company, but I'm not quite sure how that would be valued. My problem is that I'm unsure how the value of the company would have changed if the deal had gone ahead. For example if the company was worth 10million before the deal then, even with a large percentage of the debt turned into equity, is it worth more than the 10 million, if not instead of owning 100% of 10million you now own 5% of 10million and have lost another 95%. But would the company be worth more with the debt problems "sorted" so would the comapny have been worth say 20 million if the deal had gone ahead so now your shares have "only" lost another 80%.
If I'd been a shareholder I would have voted for the deal (at least I might have got something for my shares), but would not have put in more money.
I hope the directors are not getting a load of shares in the new company and would hope that they are turfed out by the new owners as they are responsible for the company failing.
What was Choltrane's proposal, not being a shareholder i hadn't realised they had made a counter offer?