Well, after reading the affidavit, and what we've been through the last few months. I guess I'll spit out my conspiracy theory of what is happening here. Disclaimer: this is opinion, not fact, lol.
Step 1) New Investors in PP were lined up and hence the private placement was announced. Deal was put out offering 20% plus 35% CVR.
Step 2) US Hedge fund lead knows that everyone else won't jump in unless they put up their money. and all the money was needed to get this done, so they squeeze the company, delay, and use excuses to negotiate 49%.
Step 3) Lead Hedge fund sees that the squeeze worked and decides that they'll try it again, using the leverage of time and follower smaller hedge fund trying to squeeze a larger CVR %. Bob says we can't, we've already given up too much, we could be subject to lawsuits, etc. After all, we've already likely given up more than the 50%.
Step 4) Bob makes an alternative proposal. Buy the stock on the open market, its still a 4-5 bagger at these levels with a $600 million settlement. Same as your debt.
Step 5) This is where things get foggy, delays happen, etc. All within the law of course. Try proving otherwise. With the delay, the share price falls, as is predictable, selling ramps up up to the day of default. Oh, and the capitulating factor will be the CCAA filing. In this time frame, tens of millions of shares are sold on the market, at very attractive prices. Somebody has to buy them all. Enter US Hedge funds, scooping up all shares availble. After all, as the affidavit says, most of the shareholders are retail.
Step 6) A few weeks after CCAA is filed, Private placement goes through as proposed in the affidavit. We get the $120-$135 million, and deal is approved by all parties involved in the CCAA filing. Heck, we may even get another $20 million in DIP financing that we probably don't need, but will obviously help feed managment, lawyers, accountants, etc for the next two years, in fees on top of fees, etc. Similar to the last 10-15 years. Keep in mind, in these few weeks in the CCAA, US Hedge funds have scooped up tens of millions more shares. Don't forget, we could have easily gone to the Venture exchange too, so why didn't we? This helps the hedgies to get the 'MORE' that they wanted.
Step 7) Company emerges from CCAA, PP Done, DIP done, shares rebound and rise over time towards either a settlement, arbitration win, or Chavez exit or death. In two years, Hedge funds, DIP financiers, lawyers, bankers, accountants, management, etc all win. Shareholders also get to some of their money back, maybe some even profit if they've managed to average in low enough.
If this theory, as I believe it, is true. Then we might be ok as shareholders in the end.
BUT MAKE NO MISTAKE, this is not 'shareholder friendly'. We had to take a large hit over the last couple of months to go this route. I'm sure a lot of innocent shareholders sold and lost a lot of money, and may not even be able to get back in. If the PP was announced and done on October 28th, the shares would have stayed higher than they are now. This is a game financiers know how to play, they squeeze all the money they can out of every deal.
Oh, and be careful on these message boards, there are people here who don't necessarily have the best intentions. Use them for some information. But take opinions and 'facts' lightly. Even mine.
This is all just my opinion, and i am not making any accusations ;) lol. Don't trust anyone when it comes to money. You make your bet, you take your chances.
Cheers,
FK.
