I agree it wouldn't make sense to go down the path of liquidating assets, I'm just explaining there is a benefit to being secured vs. unsecured if that wasn't already clear.
Being de-risked in this regard also makes a series of P&I payments look much more attractive to underlying investors. Who would complain about a 2.6x return on a debt position albeit a stressed one. Sure if they can buy up all the debt and take the business private, re-list in a few years and then jam it full with debt again that is certainly on the cards and I wouldn't put it past them. But that isn't the current situation.
What you suggest is as plausible as other scenarios. They've acquired from what I understand a small parcel of the overall debt, and to the extent they want to and are able to acquire more obviously changes the situation. I've already outlined why I think it would be difficult for the other banks to sell their debt but this may not be enough to stop them. If S&G is to survive, these banks risk burning their future relationship.
I've indicated previously that a small future CR might at the right juncture not be such a terrible scenario to the extent S&G can control this. I.e. interim financial results solidify momentum in recovery, some of those big ticket items come off (e.g. NIHL etc) and the SP recovers a bit reducing the dilution.
Are you expecting the banks to require all of the term loans to be repaid in full at maturity? What is your view on their ability to refinance?
SGH Price at posting:
31.5¢ Sentiment: Hold Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)