Swc, at the end of the day it is your money and your call, but to address your points:
- Banks have been given a 2020 plan to consider.
What we know is that:
Listed law firm Slater & Gordon is set to unveil a proposed debt for equity swap, after presenting a proposal to lenders last night. Sources said Slater & Gordon fronted its lenders at 7pm on Wednesday, which was late enough for its UK banks to join in and early enough to see the locals also involved. It's understood the company's par lenders did not like the proposal, which would see them take a significant haircut. Most focus was on the UK business, which sources said was effectively worthless under the proposal.
http://www.copyright link/street-talk/slater--gordon-fronts-lenders-details-coming-20170215-gudzea
Hardly a promising start.
- I doubt if SGH only have got a plan A?
I would think at this point they only have one plan and are trying to negotiate along those lines. In the end it appears to be the board keeping the company afloat for staff, clients and the lending syndicate - at the expense of shareholders. As many posters have mentioned Grech did not mention shareholders once in his address on Monday. To me that is ominous.
- They keep their plan(s) to the chest. That could indicate a lot of negotiations are going on behind the scenes. I surely would expect that!
They have kept everything close to their chest and that has left shareholders uninformed for long periods of time. In fact it has meant that the media has consistently been where shareholders have been informed. This is not a positive.
- We have an improving cashflow almost positive even after the one-off expenses being paid.
No. You have negative cash flow. You also have suppliers now beginning to ask themselves whether SGH becomes a COD proposition which will inevitably put new pressure on cash flow. Is that going to spread to those providing marketing services, real estate services or anything else on account? The company is already on a very tight leash and may end up strangled if lenders see the situation becoming terminal.
- We have a positive Barister's opinion on the escrow money to a possible value of $80mil.
Sure, it was one of the reasons that I held for so long however as Skippen said at the AGM,"Proceedings relaying to the claim itself may take a number of years to resolve." At last check WTG intend to contest the claim so any money (if the claim is successful) may not be around the corner but rather a long way off. This company needs cash tomorrow.
- Then we don't know if we will be going after the DD entities. If we do and if we indeed are successful then this have the potential to run into $100s of millions.
Pure speculation at this point with the biggest problem being that SGH does not appear to have time. It desperately needs cash not another two or three year litigation.
- On that alone would I sell for $0.07?
Yesterday it was 10 cents, the day before more. In the end if you still want this sadly it appears that you'll be able to sell your holding today and get it cheaper tomorrow, the day after tomorrow or next week, providing it continues to trade. The volumes are increasing and don't forget that the register is over 350m (only approx. 50m traded today). Maybe it will settle down tomorrow, maybe not.
- Maximum risk is 7 cents whereas potential gain is $8+ if share price comes back up to what it was less than two years ago.
Maximum risk is 100% of your capital. This will never ever, ever, ever see $8+ and I really do wish that you would stop saying it as it is completely disingenuous and unrealistic. You will likely find yourself with nothing due to a forced delist in some shape or form or heavily diluted (A company with 50m NPAT and 4 billion shares trading at 10 P/E is 12.5 cents - that's before factoring in remaining debt, complete loss of UK RTA small claims revenue, loss of reputation, CA and any other variables).
I'm sorry but at this point it appears to be game over and the above points you make are certainly not reasons to hold or buy. As I stated at the beginning though it is your money and your call.
