"This is why I think that any new Holdco Common
Shares to be issued to SHLDQ Stockholders has
to be included in the 363 Sale -
“ Securities Consideration “.
It doesn’t make any sense to me that Holdco will issue
new Common Shares outside of what is owed in the
363 Sale. "
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in the apa, the securities consideration is defined as: "debt or equity securities in buyer (to be clear, those would be securities issued by esl, not securities issues by shc which esl holds), in an amount and form to be determined by buyer in an amount and form reasonably acceptable to buyer, including as to subordination"
to answer your question, i would think if the securities consideration took the form of equity a number of things need to happen for that to occur. although the apa permitted buyer to be esl it also provided that buyer could be a designee of buyer. not sure esl has securities in its own name which seems to suggest that the name of the acquiring company will be something else for which transform holdco is now a placeholder.
if securities, then those securities would have to be applied for and presumably some type of prospectus would be issued. while i can see that a company would not want to actually issue more securities than it needed, that wouldn't prevent it from having a great deal more securities authorized although not issued.
that then begs a further question. if the buyer issues equity securities to the seller, what is the seller going to do with them? as you suggested and as shown in the verbiage around the diagram, it could sell them on the open market, or one might speculate, issue them to its existing shareholders (which would include giving the lions share back to esl)
based on an earlier post (long lost memory where it was sourced) in exchange for esl cancelling its $1.3 billion in debt which shc would otherwise have had to pay, esl said that debt was being exchanged for shares in holdco (esl's company). in order for esl to convert that debt to holdco shares, then more shares would have to be issued than the amount paid to shc as "securities consideration".
sorry, additional questions raised with no answers as of yet.
