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I don't think they've mentioned cash dividend for common shares recently, so it might - or might not - be of the table (they did list what they wanted to spend the 40MUSD on, and it was not dividends for us)
With regards to TRW-shares they are planning on distributing them BEFORE the preferred shares. Which makes sense if us common shareholders want to convert, but does not make much sense if Solomon is hoping to have 59-cent shares converted (why give THEM the TRW-shares?)
We should be happy that the volume is low, because all shareholders seems to be very saturated and Solmons never-ending-story of failure makes sure that we have very few new shareholders.
IF (...) Solomon succeeds with the G-shares, both selling and converting, then that would be a really good thing, but there is a HUGE if here. And first the SEC has to approve (not sure if the delisting from Merkur will affect this or not)
Not impressive at all, but it is a change from what we've seen the past two years with a never-ending downturn. Keep a halt to the dilution and start to deliver on some promises and we should be able to turn this shit around (then the question remains how many months, years or decades it will take for us to go back in green)
In hope of being proven wrong; the dividend(s) mess-up this autumn was the last straw in terms of credibility. Solomon has to prove himself worthy, and good/nice/fancy IDEAS isn't proof (on the other hand; the PPS is up 100% so far this year)
There's two different offers;
1) You can buy preferred shares
If you buy then they will cost 40$ each, but you also get a total of 10 warrants (see below)
2) You can convert from common shares to preferred
If you convert you will have to convert 27$/PPS (at the last three days before the offer expires) for one preferred share. You do NOT get any warrants.
There will be no difference between the preferred share between these to offers (the difference is the warrants) and they will give a cash dividend of 2.8$/year. The liquidation-price is 40$ (regardless whether you paid 40$ or shares worth 27$), but they have no expiry-date so SIAF doesn't need to liquidate them. Also, SIAF (not you) have the option to convert the preferred shares back to 15 common shares (regardless how many shares to gave for the preferred share) - I don't remember if they had to wait 5 (?) years before this or not.
The warrants (that you only get if you buy the preferred share for 40$)
They will each cost 1$ to activate (if you do), and will be divided in three; 3+3+4. The first warrants can be "converted" into common shares (for 1$ as I said) in 2022(?) and then the next 3 the year after and the last 4 the year after. The warrants will NOT be on a marked, i.e can't be traded.
That's a summary of my understanding (and memory...). If it sounds interesting you should read the filings and check
Who knows, but from the filing it seems that it was a mandatory reminder.
Stupid question, but why do you think the F-1 will be a driver? (considering the credibility-issue, all the promises and mess-ups)
Not sure if ordinary people (outside the US) actually have the right to convert into G-shares, or is the stuff on page 288 and onwards (in the S-4) just legal words?
Cfr;
What I meant was that if the conversion-part is handmade for the lenders who bought stock at 55 cents, then they should convert to the G-shares before the TRW-distribution or us - the actually common shareholders - will be screwed (TRW-shares-wise). Those lenders probably don't have an interest in TRW-shares anyway
Yes, at least if your definition of "moron" is "someone who trusts Solomon". It does seem rather folly for ordinary investors to convert shares (buying G-shares with warrants is somewhat different) to accept a "loan" in which the interest can be postponed for eternity (the only thing here is that the common shares can't get any dividends either if the G-shares hasn't gotten their dividend).
Which leads to three options;
1) This is really horrible work from the person who made the propect
2) They are looking for morons
3) It is handmade for those lenders who got shares for 55 cents and who trust Solomon
It does seem that the convertion from common shares to G-shares is handmade for those who got shares at 55 cents. If that is the case, then the number of outstanding shares might be reduced quite a bit. HOWEVER, then it doesn't make much sense to have the TRW-distribution BEFORE the convertion to G-shares.
From what I read there is no deadline as to when the G-shares will be liquidated, it is only stated that they can't be converted before a certain date, i.e the G-shares might be in existence forever (but with the 2.8$ interest/dividend)
We don't need this kind of uncertainty, especially after all the broken promises and breached Solomon has made in the past...
However, this part is "hidden" elsewhere;
So which do you prefer? The one that is trying to do things, but have a long track-record of failing, or the one that is mute as can be?
A loan in itself isn't a bad thing, but the way they played it - especially with the lack of credibility - it doesn't seem very appealing
If we had been able to choose whether to convert back to 15 common shares and/or the same ration as we have to convert to the preferred shares, then things might change, but if SIAF is the one to choose then we have a downside risk (which we can't afford to have considering Solomons track record in terms of shareholder value...)
Now, what happens if the PPS is at 2$? (assuming the TRW-shares have been distributed)
Converting common shares to preferred shares
We need 27/2=13.5 common shares to convert. Down the road SIAF can choose to convert them back to 15 common shares (i.e 11% more shares for us), while we're getting 2.8$ for our 27$ value, i.e 10.4% interest
Buying preferred shares at 40$
Instead of buying 20 shares and converting 15 of them (i.e keeping 5), you get 10 warrants. If the PPS stays at 2$ then you'll end up with 1 preferred and 10 common (or 25 common) for the total sum of 40+10=50, i.e 2$ each (if the preferred shares are converted). The total calue being 1x40+10x2=60 or 0x40+25x2=50
What if the PPS is at 5$ down the road?
ECAB will end up with 1 preferred and 10 common, or 25 common, for a total price of 50$, but in this scenario the value of the shares are 1x40+10x5=90 or 0x40+25x5=125
For us we either converted 13.5 shares and they are now worth 1x40=40 or 15x5=75, or we kept our initial 13.5 (which would have a value of 67.5)
So the higher the PPS if in x years, the more we loose if SIAF doesn't convert the preferred to common shares. Converting seems to be a bad option, both for a low PPS (where we can end up converting 100 shares and then SIAF converts back for 15) and a high PPS (where we would have been better of not converting if SIAF does not convert back to 15 shares)
I think it would be very Solly, I mean folly, of them to do that with the lawsuit
Are you planning on converting (some of them), keeping them, or are you just planning on trading those additional shares?
Sometimes not even RD knows the answer...
Two things to consider;
1) They are trying (...) to distribute the TRW-shares BEFORE the exchange to preferred
2) From my understanding the exchanged preferred shares will NOT be entitled to the warrants (that is only for those who pay 40$ for the preferred)
Also, the PPS at the date of exchange should be taken into consideration. Currently you have to pay ca 100 common shares for 1 preferred share. That will change, but whether it will 200 or 20?
Also, I assume the preferred shares will not be entitled to any cash dividends or stock dividends. So then we need to consider whether that is a posibility or not.
Were they planning on TWO corporate actions? (I assume this counts as ONE?)
I believe you have to buy the preferred shares to get the warrants, and that 30 warrants at an buy-price of $1. As a bonus of the 7% interest rate.
Disregard the major credibility-isse Solomon has, this should be very interesting for many people. If they are able to fix the TRW-distribution, i.e regain SOME credibility, then maybe there will be good demand for the preferred shares.
Such things are normally handled "automatically" by Nordnet/Avanza and the like, but I don't know in this case.
Also; will the exchange happen before or after the delisting from Merkur?
Converting the SIAF-ME shares into preferred shares before/as part of the delisting would be nice
Thanks. Whether our current common shares will be entitled to TRW-shares or not is crucial. If we're sure that we don't loose the TRW-shares I might be persuaded into converting my common shares.
Fun (?) fact;
1m shares à 27$ (for converting purposes) = 27 000 000
50M common shares à 20 cents = 10 000 000
So at the current PPS we can all convert our common shares and there will still be room for 25M$ for fresh blood (17/27*40)
That was my first though, but this one isn't targeted like some offerings are.
Don't know if Nordnet/Avanza will be very helpful, but hopefully they will.
However, first we need to figure out what this means for the TRW-shares; will the preferred shares get them as well, will we gamble our TRW-shares, or is the TRW-distribution of (delayed)?
The big question; how will a TRW-distribution affect the preferred shares? Has anyone read anything about that?
I.e if you convert your common shares to the preferred shares, and then there is a TRW-distribution before the warrants take into effect, will you have lost your TRW-shares???
That part didn't sound very logical to me. I assume they want to isse 1m preferred shares to repay some debt, but this way they will convert many common shares into preferred. Might be one way to increase the PPS as well? 7% interest on the $40 = 2.8$/year which we can convert at a rate of 27$ (if I didn't misunderstand), i.e close to 10% interest (and then the warrants as a bonus)
Yes, for the warrants. They window for buying them are in 2022-2023 for the first series I believe.
Also note that they offer us to exchange our common shares into preferred shares, based on the preferred share being valued at $27, i.e ca 100 shares for 1 preferred share.
Speaking of dilution;
Yes