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Sir in Miami co J13 Qs, in examiner answer its written that current value of the unsecured bond is estimated at $56•8m (appendix 4) and if the unsecured bond holders are to be offered a 10% equity stake in Mlima Co post-listing, then only the share price at $5•86 would be acceptable to them. (This I have understood)
If the listing is made at the lowest price of $4•51/share, then they would need to be offered around a 12•6% equity stake (This I am not getting in my head). Can you please explain?
The bond holders have to be given shares worth in total $56.8 million.
If they are given 10% of the 100M shares then they would be given 10M shares and the share price would have to be 56.8M/10M = $5.86.
However if the share price is $4.51 then they would have to be given 56.8M/4.51 = 12.59M shares.
Since there are 100M shares being issued in total, this would mean given them a 12.59/100 = 12.59% stake rather than a 10% stake.
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