Question about structuring a transaction
So there's this energy company that has multiple 60% finished projects . The founder pulled together 40m debt and promised he'd put 10m in equity. But he never did. The company ran out of cash (40 mil) and decided to sell. And there's this one corporate buyer willing to paying 60m. You cant do an asset sale due to gov regulations on energy plants(not in the US). But if you do a stock sale, the owner has 0 equity. It just doesn't make sense to me. (He will get 20m for putting in 0 equity!) How would you structure this transaction?
(This is a question my dad quizzed me. All the numbers are fake. He's on the corporate buyer side. They got it figured out. I'm just curious about it)
Bump
No one?
Your father is a moron if he is paying $60m
Why would a buyer pay $60mm for something that costs $40mm to build?
Why would the lenders not structure the deal with a provision mandating the equity commitment?
This transaction would never occur (if something similar to it has then please provide a reference. I would be very interested to read it).
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