All KWG Longs,
In order to sell multiple voting shares, KWG must sell them at the fixed ratio (or essentially in bundles of) 300 subordinate voting shares. As multiple voting (“super”) shares are acquired it reduces the subordinate voting shares at the rate of 300 for every multiple voting share sold.
It is a zero sum game! No new shares are being created under the proposed capital reorganization and thus will not lead to dilution! This proposal is all about creating two classes of shares and NOT net new shares - one class of shares for institutional buyers and one class of shares for retail buyers. Current shareholders of KWG will remain largely unaffected by this proposal. Adding a class of shares that will attract NEW BUYERS (in the form of institutions) to our stock will hopefully intensify demand for our KWG shares putting upward pressure on the share price.
The Board will NOT be able to “…create an unlimited amount of NEW 300 shares…” The Management Information Circular does not substantiate this claim in any way.
Using the term “unlimited” in describing the multiple voting shares is a very common, typical and customary practice when drafting Management Information Circulars, Prospectuses and other securities documents. As this issue has been discussed at length already on this site, I direct all that care to refresh their memory on this issue to the posts that MarlboroDog and I posted back in early July. I also copy/pasted the appropriate section of my July 5 posting for convenience.
MarlboroDog on July 18
http://agoracom.com/ir/KWG/forums/discussion/topics/670130-notice-of-agm-meeting-place-unlimited-shares/messages/2101543#message
Keep Digging on July 5
http://agoracom.com/ir/KWG/forums/discussion/topics/670130-notice-of-agm-meeting-place-unlimited-shares/messages/2099134#message
“Second, there seems to be some sort of preoccupation with the term “unlimited” in the description of the Multiple Voting Shares in the Management Information Circular. Quite simply, management (and counsel who drafted the document) was compelled or more likely obligated to use the term ‘unlimited’ because they just do not know. They do not know how many common shares will be outstanding in the future and therefore do not know how many Multiple Voting Shares will exist in the future since the two are explicitly tied at a ratio of 300:1. Further, they do not know how many investors will exchange their common shares for multiple voting shares.”
My best to all KWG Longs,
Keep Digging
