1 for 1 at 8c, page-66

How can it go downhill so quickly?

Incompetence and debt, particularly short-term debt.

As soon as they took out those loans with Chinese banks, any basic finance course would tell you that have to get your assets producing a cash-flow as soon as possible. Instead, GXY responded as if access to the extra finance was a license for rapid expansion. Now the creditors are licking their chops.

For blue sky expansion plans, without existing cash flow, you should restrict yourself to equity until cash flows to cover interest payments (at least) guaranteed. We might only be a few months of achieving that, but an inch may as well be a mile in this market.

Management will respond that the were cautious, but the accident at the plant derailed there plans. But that is not good enough. Any financial plan has to leave enough buffer for unexpected events and delays, ESPECIALLY when you are already levered.

Further, in this post-GFC world, where yields are scarce, leveraged companies without income are the easiest of targets for shorting. A good financial manager would have known this, preserved cash and minimised debt...not got greedy!