Banking covenants are linked to book value. Goodwill is in the books - write it down and the covenants go.
As far as Quindell purchase goes, the data points so far are:
- it has under-performed vs. expectations so far (but hopefully forecast turn corner soon)
- Quindell shareholders think the sale to SGH was a massive windfall for them. They're jumping with excitement!
- there's lot backchat blogosphere, can question credibility some this, that says Quindell close to worthless and SGH were colonial patsies
The SGH bet now is on Quindell. Comes good, all good. Gold in fact. If it doesn't, then IMO steeply discounted CR to satisfy banks. I'm guessing but say a 5:1 renounceable rights at 15c to pay off some debt.
Hence: research and believe Quindell.
SGH Price at posting:
69.0¢ Sentiment: Sell Disclosure: Not Held
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