Loading up the truck, page-2848

You will never find me accusing you of being lucky on message boards. You've been constantly wrong and unlucky almost every time I have seen your posts @SGH on HC. In particular, you consistently draw unrealistic conclusions from poor evidence and then spin them into wild ramps. Almost every time - this is just an example - as was your post just above about some HC message supposedly in your mind refuting what the Australian reported! Or even thinking that the timing of this particular appointment has bearing on anything material. They are corporate advisers, not undertakers. If anything it's a small positive because these advisers need to be paid too, so they obviously can be afforded and expect payment.

I have already said I think E&Y's opinion is some good news. You think it means everything is solved. There are things you don't understand about going concern and audit:
- "reasonable belief" is not the same as a "guess", auditors operate on former basis not latter
- can be a going concern with a share price of zero or near / happens when equity wiped out via restructure
- it's commonplace "going concerns" per recent statutory accounts are no longer going concerns in short order, months later, for variety of reasons
- the hypothetical early repayment date here would be exactly a year and a day away from the date of the accounts, which takes it just outside insolvency definition window <12 months hence not even hypothetically being "current" as at time of signing accounts. It's cute.

As an aside, the actual accounts are absolutely awful and show a business losing money hand over fist in dire straits that should never have been bought, let alone for $1.3b! Whopping operating $340m loss for the 18 months, and this horrendous number doesn't include any writedowns!

Putting it all together, the opinion means to me that management think, and auditors based on reasonable belief agree, that SGH can stay within debt covenants, including facility limit (available liquidity $119m as at 31/12), and/or renegotiate the terms. This very likely means UK no longer losing money as fast as it did as presented in these accounts - because otherwise the last bit of the facility left would be quickly exhausted. That's the good news!

The H1 results were pretty awesome...even bit worse than I forecast on almost every dimension.:) There is no guidance now, not when it was withdrawn, and not since.

I am sure you have written letters to the editors and everyone else about your great insights. Go for it! Maybe write to the thousands of SGH employees and encourage them to buy few thousand dollars worth of shares each - it would do wonders the share price if the people in the business bought a few. While you're at it, write to them and tell them to stay put and work hard, despite all the bad news - as a shareholder you insist.

I'm sure PWC grieves your loss.