Newco has issued 200MM shares.
Five percent, or 10MM are in the hands of the SNs.
The remaining 190MM shares are apportioned 75/25, old preferred/old common.
As everyone knows, ‘old preferred’ are the aggregate of $4B in TPS and $3B in Ps, and $.5B in Ks. Ps and Ks translate into 66.5 MM of Newco shares.
Of the old preferred, $2.5B of the TPS was in the hands of the SNs. That translates into 47.5MM shares of Newco.
Likewise, $1.5B of the TPSC was in the hands of the TPSC. That translates into 28.5MM shares of Newco.
Therefore, it is beyond question that a total of 86MM shares of Newco or 43% of the company is in the hands of the SNs and the TPSC, i.e., are non-retail.
Moving on the the remaining old preferred, the Ps and Ks, this is where things get tricky because we have to make some assumptions. I have talked to a number of reliable retail shareholders and the combined guesstimate is that no more than 1/3 of Ps and Ks. Using this as a benchmark, means that 2/3 of the 66.5MM Newco shares or 44.33MM Newco shares are in the hands of non-retail. By ‘non-retail’ we don’t know if that group includes TPSC or SNs; we just know those shares are not owned by retail.
People can try modeling with numbers of P and K ownership that are greater or less than 44.33, but I am comfortable with this figure.
This leaves the Qs, which, as we know hold 47.5MM shares of Newco, reflecting 23.75% of the company’s common shares.
This is a real wild card. We know that 1.2B Qs opted in, and after much thought I decided to make the assumption that retail owned 70% of those Qs, which translates into 33.25MM Newco shares. That implies that the remaining 30% of old Qs, or 14.25MM of Newco shares, are in the hands of non-retail.
Again, people can model the Q factor using different ratios than the 70/30 I employed.
The result I obtained is as follows: non-retail owns a combined total of about 144.58MM shares of Newco (47.5MM + 28.5MM + 44.33MM + 14.25MM = 144.58MM) or 72.29% of the company.
How this affects the NOLs is for the tax experts, but as I see it, a buyout would be much more problematic if retail owned more of Newco.
