SGH is a mess - what a disappointment, page-357

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ashleywd

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22/02/17

00:53

Post #: 22795424
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Originally posted by mike8654 ↑

"At the risk of sounding like Krispy - strikes me all is not what it seems.
Anyone got any ideas."

People who've worked in insolvency would agree - all is not what it seems - unfortunately it's usually worse.

As I think Grant pointed out, the words in the announcement saying ".. the continuing support of the company's lenders is fundamental .." is code for "we have reached the point where we need more help from the banks or we're done for." If I recall correctly a semi-annual debt reduction was coming due in a few months time - no cash for that.

Other things will be happening behind the scenes - like:

- the lending syndicate will have been talking to big insolvency firms in UK and Aus about the issues involved in a receivership.

- SGH has about 3 months worth of normal trade creditors - some may be thinking it's time for cash only terms if they are in a position to do that

- SGH had another $287M of "legal" creditors at last report date. If those credit arrangements are withdrawn it will eat into SGH's remaining cash

- auditors may be giving trouble - eg "going concern" tag, more write downs

etc etc

I'm sure you're sick of getting advice from all and sundry.
As a human being in the face of adversity you deserve the maximum 5 stars.

But sometimes best not to rely on just your own judgement.
(And definitely not what HC posters say ..)

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I'm going to quote this post by mike, simply because it echos my thoughts but it is so damn good. Holders would do themselves a favour to read it again.

In particular; the risk of creditors starting to demand cash from SGH brings forward their expenses by a couple of months. This isn't something the company can afford and could be the very thing that pushes SGH over the edge and into backruptcy.

SGH Price at posting: 17.5¢ Sentiment: Sell Disclosure: Not Held
6 Upvote

0 Great analysis

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SGH is a mess - what a disappointment, page-357

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