He transferred 350,000 WANdisco shares at 320p to investment firm Equities First in return for a three-year loan. Sources said the loan was continuing, despite the share suspension that makes it impossible to value Richards’ collateral. He owns 1,836,867 shares, a 2.7 per cent stake.
So, are the shares just partial security? Or is the loan non-recourse – that is, they can’t ask for more security than they’ve already got?
That second would be very weird but I seem to recall something about them doing that indeed very weird thing before.
On the other hand, if he’s already spent the money then he’s bust, inne?
Or if his wife’s already spent the money he’s doubly phvcked.
Could make an interesting case. The security was shares in a company with a long history of losses and odd-looking accounts. Some Soapy Jo might want to make a case that the proffered security was obviously worthless when offered and the loan should be called in. I guess the key is how First Equity value the loan, or provide against it, in their next accounts
Yes, there’s some vague idea at the back of my mind that First Equity offered non-recourse such loans. I don’t know where I saw that, I do recall being very surprised that anyone would/did. But it was them, I’m sure of it, whose business model was that they managed the equity risk. There would be no more calls on the security.
Damn stupid model but that’s something else.