Kagara's largest secured creditor is also its largest...

Kagara's largest secured creditor is also its largest shareholder. All other secured creditors have been paid out as I understand.

The big question is - What do Guandong want? A liquidation of their own debt and assets. Nobody wins there and they I don't think they want that if they're talking to Joe Tracey about a restructure.

I don't know what Joe and Guandong have discussed and what ideas have been floated for the creditors meeting but on paper if I were Guandong, I'd be looking to.

1. Cancel my own 19 million debt to Kagara (see 4)
2. Pay out Kagara's remaining creditors (50c in the dollar sounds fine for WA creditors but it's a small part of the debt)
3. Cancel 90% of shares issued (10 for 1 offer in new entity)
4. Issue new shares to creditors and shareholders (including Guandong)
5. Guandong receives an additional stake as a trade-in for debt (at a heavy discount).
6. Float rest
7. Keep AB and Mungana stake

I don't think non-secured creditors will accept 2.5c in the dollar. They would have to do something like the above and pay more than 2.5c as well as offer shares and then sell the Southern region and Mungana assets at their leisure to reduce the additional amounts they will ultimately have to front to unsecured creditors.

It's all speculation but it's getting late in the game. Either Guandong front up cash or the remaining assets are liquidated.