I am back. So is SGH, page-34

1.
It is not amusing to read the musings of the sore bitter X holders and arm chair analysts who think as if they are the ones who have bought the debt from NAB & WBC and know every thing re the game plan wiping SH, employees and directors holdings into oblivion..
Desperation of X holders, non holders, sideliners very clear and loud in their messages.
And the game of proving mine is bigger than yours continues to no end.
2.
WOW.
Hats off to your creativity and the free time you have on your hand to waste to talk down a share and its holders when u don’t have a single cent invested in it.
Bulls don’t need to push sideliners to buy as they are happy to wait and decide when risk is less and there is more clarity. Similarly bears need to be saying their piece and move on.There is no need to attack any one and make it personal. Just share your views and leave the rest to the individual.
3.
It is even more interesting to see the bitterness of life of some reflected on here when they claim to know TA and run SGH down just by attacking the messenger and not accepting the fact that RSI in daily chart has bounced from extreme over sold level with big bullish divergence and MACD has crossed over to give a buy signal and that too on a combined volume of 63 million plus.
Never ever happened in SGH in its life time on ASX on an UP DAY that was up only and insignificant 46%.
And they want me to show a chart to prove that as experts on TA.
Amazing they cant see it.
When sun shines and U close UR eyes does not mean sun has disappeared.
This proves the point that one has to be very careful about whatever one reads here as many may have an agenda of their own. However , there are no certainties in the market.Only possibilities
4.
Let me ask you all one question.
If you bought all this senior debt for pea nuts in a company like SGH,
What will serve your interests better.
By destroying SGH and every bit of it and pick up the bones with massive D 4 E
Or by restoring it to its previous glory and make it do even better than before as a darling blue chip stock.
5.
Will you as a senior debt owner of the company make more money by going for D 4 E and make it a penny dreadful or making it stay there and issuing billions of shares
Or by making a decent respectable D 4 E and restoring some of its respect and glory back.
6.
will you have a short term plan for few months on or a 2-5 years plan for SGH and realising
many fold gains by getting SGH stock price up to its fair value by restoring SGH to normal health.
7.
If you were to buy a company like SGH or say SGH at its historical NP of 15-16% and say revenue of just 750 million dollars and no debt, how much you think it will fetch in the market .
Think think think. I know you are falling off your chair and UR head is really hurting considering the mind boggling number in billions of dollars you are coming out with.
(A company is not properly valued at book value. Book value is purely an accounting term and reflects only a company’s past and not future.)

To properly value a company professionals will consider sustainability and future earnings capacity. Where is that included in the book value (balance sheet)?)from SUCEEWILLCOME

Yes you got it right. 730 million revenue x 3 times a conservative multiple factor gives 2.2 billion dollars
And you deduct 800 million debt( which now may not be exisiting) = 1.4 billion price.
So let us assume that SGH is distressed so let us deduct 100 million from 1.4 billion which is the cash we assume is injected to stablise the operations and get it over the hump for these 6-12 months.
So this company if you want to buy is still worth 1.2 billion dollars if you deduct another 100 million from 1.3 billion for the interest and other things.
So if today SGH was put on sale in the market, it is still worth 1.2 billion dollars plus and an average price of say 3 dollars plus for the stock.If you add 400 million 1.2 billion for the debt waver which will happen even with the senior lenders as they have paid only 25% for the debt.That further raises the worth of SGH stock price to 4 dollars. Even if for every existing share,3 new shares are issued, it still gives a market price of 1.33 no sooner SGH working turns a little bit normal and with just 750 revenue, no NIHL,No escrow and CA paid by insurance of 100 million.However we don’t know how many new shares if any will be issued ,or there will be just convertible notes and that too pushed out 2-3 years for conversion.
AG, BOD, Senior lenders and the market knows that. It happens in the markets that when there is panic and so much of emotions, market for some time misprices the stock.
So in a couple of years SGH can still have a market cap of 2.5 billion dollars. Cheers to that….. if all things being equal and achieved on its metrics.
8.
Now ask yourself, how long before SGH can be restored to that health.
9.
Ask yourself .Were the numbers of 1H re revenue normal considering how many offices were closed. How many employees were made redundant and how many were moved.
How do you think that would have affected the revenues, profits productivity etc etc.
10.
Where is the real value of SGH and what happens to the future of SGH if there is massive D 4 E.
Wink wink.I know you are smart as a senior debt holder and U can be the big owner of a v v successful and big law firm in a couple of years if you play your cards right .How can you do that?
Who is going to help you do that.
11.

AG .
Will he go as he is the info bank of SGH considering so many serious things happening and considering we need to take it higher while sorting those issues.
JS is dispensable.
So looks like unfortunately for those who don’t like AG I think he will continue to be there.
12.
Have these arm chair analysts got the independent valuation of SGH done under different scenarios.
Do they know the numbers.
I bet they do.
Because they r the consultants who got all the info.LOL.
13.
Other issue .It is wishful thinking of those who have missed the bottom.Leaks already confirm that senior buyers of debt are ready to inject funds tio stablise SGH operations. So why CR.
If they inject funds they make more money on it.
Doomsters were wrong last year re VA admin etc etc and they were wrong again last week and they will be wrong again when the next ANN comes.
14.
Ask yourself one most important question….How much you will have to pay to buy SGH today if it was debt free or its debt was manageable?
15.
Other thing that all of us have not considered is who has bought all the shares with so much of massive volume going through.
We all may be in for a surprise when the numbers come out.
Imagine if some one has already cornered 50-100 million or even higher number of shares what it can do to all the dynamics of the equation.Not saying that it has happened, but we cant deny the possibility.
16.
My thinking is that D 4 E will happen at a decent price and will be pushed back few years.
There R lot of creative ways it can be done.
Will be wise to let the experts think about it and do it.I for one do think that D 4 E will be done in a way that it restores some value of SGH as a company and as a stock immediately rather than decimate the SH and SGH as a company..
17.
Another very interesting thing here is that all these bashers, arm chair analysts,X shareholders when asked will they buy SGH are telling that they will buy SGH at some stage.
So what do you think is their motive of being so negative to the extent of pushing current holders to sell. I leave that for you to judge.
18.
Have been writing here before.Will AG be able to do a Rupert.
Looks like he has. First chapter has been written as looks like no VA delsiting etc etc. survival confirmed.Remaining chapters will be written as time goes by.
19.
Market has spoken.
Never in the history of SGH we have seen this much volume of 63 million plus on an up day of 46%.
There is tectonic shift in the sentiment towards SGH.
20.
Considering that Banks sold out at 75% discount also tells SGH BOD and its management still fighting for all the stakeholders.
New senior lenders seem to be sensible considering the rumors and whispers that are coming out.
I sense that they are acting very responsibly and see value in a win win for every one in the current scenario.They can see a resurrected SGH as a very successfull legal services company.Because they do realise that if they play wisely and in a fair manner, they can make lot of money .
If they don’t, and the negotiations break down then every one including them is a loser as nothing is left except few chairs and some pens and paper.
21.
This is where market is going to get the big shock in my opinion.
That is the
NUMBER ONE IS ON the degree of dilution
Number two is the price at which this dilution is going to happen.
number three is the consequent indirect debt forgiveness that happens.
All this because senior buyers of debt know what SGH” actual worth is
With all its capable staff when they are happy and where they can take SGH in few months
And in a couple of years
22.
What if the revenue shrinkage also was not real and just temporary but was just that SGH was pushed around and squeezed by insurers who were e kicking it thinking it will fold soon and its all over for them. No more claims to pay.
23.
I don’t see a TRADING HALT.
No need for it now.
Just ANN as usual before market opens. Whenever that happens.
Today or in 2 weeks time..who knows.
24.
By the way.
Experts were recommending SGH as a buy at 8 dollars and NOW a sell at 7 cents.
DYOR as usual.
I have given some ideas to challenge/stir your thinking.
You can keep adding to them.
You do what you think is right for you and I will do what I think is right for me.
No need to attack any one for their point of view or thinking.
I am too busy to be here . Just destiny brought me here.

Creative misinformation,guesswork of X and non holders is mind boggling,
Same scenario as last year before banking syndicate signed on the term loan agreement and we saw an up move from 30 cents to 68 cents.
PS.
From the ANN
The Company has been informed by the New Senior Lenders that they fully intend to implement a solvent restructure of the Company (‘Restructure’) and to work cooperatively with the Company to enter into binding agreements to reset its debt structure to ensure that the company has a sustainable level of debt and a stable platform for its future operations both in Australia and the UK. The Company and New Senior Lenders believe a Restructure by a debt for equity Lender Scheme of Arrangement is in the best interests of all stakeholders.
Last word re those suggesting one can change ones investment strategy in SMSF and then can buy SGH.
Not when UR with some one else like ING .U can’t.
FYI.
From FT.
S&G and the new senior lenders said a planned debt-for-equity scheme of arrangement would be in the best interests of stakeholders.

S&G’s main lenders balked at investing the fresh capital required to turn round the law firm, which has most of its underlying value tied up in its staff. But the specialised distressed debt investors will invest to stabilise the business, according to S&G, which hired Moelis & Company to advise on the debt restructure.
https://www.ft.com/content/cdbe2a9a-0aa7-11e7-97d1-5e720a26771b


S&G said its lenders intended to “implement a solvent restructure of the company and . . . to reset its debt structure to ensure the company has a sustainable level of debt and a stable platform for its future operations both in Australia and the UK”. S&G’s main lenders balked at investing the fresh capital required to turn round the law firm, which has most of its underlying value tied up in its staff. But the specialised distressed debt investors will invest to stabilise the business, according to S&G, which hired Moelis & Company to advise on the debt restructure.


To get more than 75% holding of SGH, senior lenders need only 915 million shares of SGH.
What if they do this by converting 70% of their 710 million debt that is approx. 500 million into convertible warrants or debs 2-3 years out at 20% discount to the SGH stock price prevailing at that time.
Or they do that now by converting debt of 500 million to 950 million shares.
There will be negotiations where both parties are winners.
Any one suggesting any thing different does not understand SGH, does not understand the intent of senior lenders re SGH and where they may want to take it and also the dynamics of the whole scenario which is pretty complex or rather unique.
This is not an advice or an invitation to buy or sell SGH.