Sino-Env - Default?

Following the company Chairman’s transfer of 67,786,436 shares (20% of the company) to Stark Master Fund on 16 Apr ’09, one of the company’s substantial bondholder is seeking confirmation as to whether a change of control has occurred and whether an event of default or potential event of default has occurred as it was reported previously that in the event of a change in control of the company, it would trigger an immediate repayment of their outstanding S$149mln of convertible bonds as well as crystallize S$45.3mln worth of potential losses on their swap agreements (if this happens, the company is in no position to repay as it only has cash holdings of S$138mln).

The board of directors are seeking clarifications on this front from its Chairman.

Regardless of the outcome, we maintain that the stock will remain under pressure as Stark Master Fund attempts to dispose off their 20% stake in the open market or seek to place out their stake as they had previously disposed off their 5.0565% stake a depressed price of between 7 to 10 cents a share and the stock is last traded at 17.5 cents.

Sponsored Links

Related Posts by Categories



No comments: