Please look at my previous posts
The loans did not cost them anything, zip, nada, zilch, they are clever accountancy use of paper figures. All legal. In fact some(most) of what was converted relates to inter company loans that existed before SISU even bought in. But in any case the money they actually put in still exists as liabilities of the group. It is only when you look at a particular company in isolation that you get a distorted figure. That is why it is vital to look at the whole picture, the whole group, to see what is going on. Of course managing and exploiting debt is what SISU specialise in.
Had issued preference shares represented actual cash in to the business it would show up on the cash flow statements. Had loans been received to the tune of £65m they would have shown up on the cash flow statements before they got converted to pref shares
If they sold the preference shares of £65m for £1 they would be in profit because the preference shares cost them nothing in the first place.
One problem SISU have with this group set up is that the £28m invested by their investors was invested through SBS&L not Otium (which is CCFC) So sell Otium and there is no way to include the SBS&L £28m in the deal.............. unless the purchaser agrees to take the liability, or the preference shares over - frankly be mad to do that. Makes Otium so toxic as to be unsaleable to a third party in my opinion and to make Otium something SBS&L can not get rid or let go of.
The preference shares are smoke screen really
