The bets are off. This morning, the Seat Pagine Gialle stock got off to a flying start (+7%), on the wave of hope that the solution to the company's problems is finally around the corner: the corporate tam tam speaks of key meetings between tomorrow and the day after tomorrow, from which a solution should emerge. In reality, for now, only the work tables abound. The possible solutions much less. And so the fate of Seat Pagine Gialle looms over the risk of an indigestible omelette for everyone: the private funds that today control 50% of the company; their creditor banks; Lighthouse bondholders with €1,3 billion left over; the employees and stakeholders of a company which, despite the many squeezes, still boasts a largely positive gross operating margin.
Above all, the real danger is that the army of 300 small shareholders who still hold about 50% of the company in their hands, perhaps bought in the mists of privatization times or paid at a goldsmith's price in the days of big hug with Roberto Colaninno's Telecom when Seat Pg leapt past the 7 euro barrier. Or on the occasion of the second leverage buyout in the spring of 2003, which brought Alessandro Profumo's right-hand man in Unicredit's right hand: Luca Maiocchi, discharged with a 7,97 million bonus in 2009 when the boat was already sinking. But let's proceed in order.
Between tomorrow and the day after, as has been said, an almost decisive meeting will be held to unravel the complex knots that separate the parties involved. There is a negotiation between Lighthouse's bondholders (mostly hedge funds united under the umbrella of a Luxembourg company) and the Seat Pg board to define the terms of any conversion and the amount of any capital increase. But first it will be necessary to close a toast to the most complicated working table, the one that has as protagonists the three private funds that control Seat (Cvc, Permira and Investitori Associati) and the Lighthouse hedges. The reason for the dispute is simple: 200 million of liabilities linked to the bonds weigh on the fate of the company. The next installment of 50 million, due at the end of the month, risks sending Seat itself into default. The main way to avoid the worst is to convert debt into equity. And on this they all agree.
The ways, however, are divided when it comes to defining the exchange values. The three funds, assisted by the advisor Goldman Sachs, propose that Ligthouse convert the credit into a number of shares equal to 75% of the capital. The share of the three funds would thus be reduced to 12-13%, the remainder to the free float. However, a warrant linked to the company's performance would also be envisaged. As profits or other set goals grow, the old shareholders would receive new shares equal to 20% of the capital of the new company. At the end of the program, therefore, Lighthouse would have a majority equal to 55%, the funds and the free float would divide the remaining quota equally. The outstanding equity would go from 80 to 400 million. The proposal has so far been rejected without appeal.
Lightouse, assisted by Lazard (Rothschild instead assists the creditor banks among which the Royal Bank of Scotland stands out), relaunches with a request for 95% of the current capital plus the issue of paid warrants with which the old shareholders can reinstate part of their share by replenishing the capital. In short, the positions are far away. It is not difficult to predict that the uncertainty will last until the end. A solution, if any, will arrive no earlier than next week, close to the sound of the gong. With grave concern for the employees, who risk losing their jobs.
And the savings of an army of deluded/disappointed people from Piazza Affari, for the most part made up of those small savers who in the past decade had deluded themselves that the Italian financial market could offer an outlet for their small capital. Today, to protect their investment, the small ones have to hope that the funds are able to wrest a share of around 20% from Lightouse. Or that the funds themselves renounced part of their claims in favor of the market. One way to remedy the failures produced in the past by the maxi dividend that squeezed the Seat Pg fruit tree once and for all.
