The pre-packaged bankruptcy plan calls for the establishment of a Guernsey based company to take over all assets from Canargo. The Delaware company would cease to exist. All common shareholders will be disenfranchised and Persistency will own all of the new company.
Management is giving away your shares.
The Court has already approved this.
I think it's a mistake, as it puts ex-Canargo Management and Persistency in a position to have to wait on developing the oil assets until the statute of limitations on stock fraud runs out. Of course they can always hope that the SEC person who conducts the investigation is a left-over from the Bush Administration wrecking crew.
But I guess if you are so fucking greedy that owning 25% of the company isn't sufficient so that you have to steal the rest...
Also, under the deal, Management gets to stay employed. Quite frankly, I would not employ people as incompetent and dishonest as Canargo Management. I think Persistency will fire these idiots as soon as possible.
This is because if Persistency wants to do anything and keeps ex-Canargo management, they have to finance it themselves. The rights offering of last year showed that nobody in their right mind would give these clowns a dime. That's also why Canargo has been unable to attract a farm-in partner. Nodody wants to do business with these crooks.
If Persistency fired Canargo Management, I suggest the value of the Canargo stock would immediately rise to 40 cents a share. That's what it was before Management started running the company into the ground in preparation for this phony bankruptcy filing. They may feel that only as a 100% owner they would be able to do so, but I suspect it would be easy to call a special meeting and most stockholders would approve replacing management
New, decent Management could start getting oil out of the ground. The stock would be worth between $1 and $15 per barrel of reserves in the ground. Allowing for the production sharing agreements Canargo should have about 1 billion net barrels of oil (including gas equivalents) as reserves. Renaissance Capital has suggested that this oil would be worth $5 per barrel. That means the stock as is in the float now would be worth $20 per share.
That would make Persistency's shares (25%) worth $1.3 billion. That's a nice return on an investment of around 15 million. This could easily be within 18 months.
In addition, as a Delaware company Canargo still has a $200 million loss write-down to work off.
