Dilution at this price, page-58

Some good comments, will try to address each one individually.

GC8 - share consolidation would not change the value of current holders holdings. Only make the SP look "prettier" .. not that that's a bad thing..

HaveACrack - Sure but we are pretty bottom of the barrel now.. I think a 20 - 25% discount to the trailing 5 - 10 day price is reasonable.. And note that $750m of debt translates to $750m of equity - from the banks point of view, a lower SP would only mean a marginal gain for them (i.e. marginally "screw" existing holders over).. Considering banks (e.g. MACQ) just took a massive haircut on loans, do you think banks in general are going to quibble over an additional circa 90m of market cap from existing holders?  Its like being a billionaire and fighting over 5 cents on the ground.

Croasian - Not sure what you are saying really. If the company does a cap raise (at similar numbers to what I said..), then what do you think that money from the cap raise will be used for ..? obviously to pay of the debt. in effect a cap raise will be similar, if not identical to a d4e swap.

Mike - ...? DSH had a margin of 2 - 3% on their 1.3bn revenue. SGH is capable of margins of 10% +. Are you trying to apply retail margins to a law firm?  And yes the cashflow in FY16 was bad for a number of reasons, including a 50m+ "investment" into NIHL.  Even the bad quindell business produced a profit last half.  The article about pre planned admin is a bit of a joke. especially since multiple vulture funds now own the debt

Nick - see my reply above to have a crack

thestrangesthing - this was a "worst case" scenario. aside from bankruptcy of course

My key assumptions above are the 20c d4e swap, assuming reasonable earnings going forward (circa $100m NPAT), and no bankruptcy. Tinkering with the first two assumptions will provide slightly different results, but overall quite similar.. i.e. a d4e swap will not reduce the SP to say 2 cents..

Anyway that's my thoughts and is largely part of the reason why I still hold. To each their own, but if I see a share with limited downside and considerable upside, seems like a no brainer to buy ..

I also note that this is still the worst scenario WBC and NAB have been "quoted" as not wanting a d4e...