Silverlake Axis: announced a structured share sale agreement btwn Goh Peng Ooi (chairman and major sh/h with 85.6% stake), and HNA Group involving 242m shares (or 11.6% interest). Shares to be transferred to an escrow account in 3 batches over 3 yrs. Div to be accrued to HNA while shares are in escrow, and Goh to receive the lower of $0.16/sh or market price at end of three yrs. This translates to an effective share sale at ~50% discount to last traded price $0.335…
We see $0.16 as a floor for Silverlake share price, with possible upside risk, given HNA would want to maximize the value of its significant shareholdings. This could potentially lead to more orders from HNA, following Silverlake’s announcement of $70m cloud computing contracts from HNA in Feb ‘10. HNA is a multi-industry enterprise group, with total assets of ~RMB160bn and a Fortune 500 Enterprise of China.
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