Scottish Re Group Ltd Perp Pfd (SKRUF)

[Enterprising Investor]

A post from 2,498 days ago on the SKRRF board.

Enterprising Investor
Saturday, 07/25/09 09:38:08 PM
Re: None
Post #721 of 1731

Mass Mutual and Cerberus deal no grand slam.

The $600 million of Convertible Cumulative Participating Preferred Shares are convertible into an aggregate of 150,000,000 ordinary shares of SKRRF. Thus, the conversion price is $4.00 per share. SKRRF was selling for $4.66 at the time.

On the ninth anniversary of issue (5/07/16), the shares automatically convert into an aggregate of 150,000,000 ordinary shares if not previously converted. SKRRF is not required redeem these preferred shares for cash, except in the event of a liquidation or a change-in-control event. Someone suggested that Mass Mutual do a reverse merger. I am not sure if a Mass Mutual buyout of the Cerberus position would trigger the the change of control clause.

Needless to say, SKRRF has unbelievable upside for the investors to break even via the conversion. To get there, the almost $700 million deficit would have to be made up plus another $250 million or so.

In liquidation, the investors would have the right to receive the accrued unpaid dividends.

Conversion in 2016 is the mostly scenario, in my view.

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