TSX:SOT.DB - Post by User
Comment by
Northforce13on Nov 08, 2024 12:06am
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Post# 36302484
RE:The key paragraph
RE:The key paragraphEverything you said is accurate
I suspect the past two quarter's writedowns were highly aggressive in order to reduce the BVPS and increase the probability of unit/deb holder acceptance of the offer that is coming.
If the units true BV is 5 (or 4 or 3) and GA manages to get X% additional equity at a fraction of that, then he ultimately turns his losses into a massive gain. He already has control of the assets, and could thereafter liquidate patiently for the best possible price.
This game plan would also explain GA's resistance to liquidation of assets as stated by the Welch bros. If the Welches were more successful in selling the assets, there would be no need for a capital injection, and therefore GA could not buy in per the prior paragraph.
Notice they have removed most of the assets that were stated as held for sale (MD&A page 19), supposedly due to difficulty selling them, possible such difficulty being the result of resistance by GA, again per the Welch bro's letter.
The PR talks of "significant discussions with certain lenders"; translation = lenders have the recap plan in hand, likely a done deal in terms of lender acceptance, going through legal.
If I had to toss a dart at a timetable, I think we will see the plan very rapidly, by the end of next week.
There is a lot to unpack from the Q.
My perception above is highly speculative and contains some degree of healthy paranoia.
The truth will be revealed soon.
Everything appears to be unfolding logically.