Folks,
I had some e-mail communications with Bruce of KWG on the topic, and here is what he said with respect to management proposal regarding the 3 classes of shares:
- subborninate voting share (SVS = our current share, voting value of 1).
- multiple voting shares (MVS), with voting value of 50 (My interpretation: A "supersize" hamburger that has 50 patties in the bun...tall stack). To attract institutional investors who are not allowed to invest in penny stocks, plus "margin allowance" for those who want to dip in the margin pool.
- special shares which would be management the flexibility to raise money later for funding projects such as the RR from major investors, if/when required.
Note: Conversion from 50 SVS for 1 MVS can be done anytime. Re-conversion from MVS to SVS, at 1 MVS = 50 SVS, is also possible anytime. In other words, shareholders can switch them back and forth. Some posters have already discussed strategy to maximize the profits by switching back and forth, but this strategy is not clear to me...hence I would leave this item aside for now. Also, the conversion procedures, especially the time required to convert one class to the other class (hours, days, on-lines, etc.?) are not clear, so I would leave this aside as well. WE can revisit these items later.
With respect to the vote at hand as per the Circular, management recommended a YES vote from shareholders. According to Bruce in his e-mails, the requirement for a YES are quoted below. Please contact him if they are still not clear to you. Noting that CLF is an INSIDER (17.4% of KWG) along with management and members of the BoD.
"For the capital reorganization (creation of multiple voting share) the requirement is a simple majority excluding management, officers and insiders (Cliffs), as well as a 2/3 majority of all shares voted."
"There are 2 tests for the capital reorg.
1- Simple majority (50% plus 1) excluding mgt. officers and insiders.
2- 2/3 of all shares voted including mgt., officers and insiders."
goldhunter
