SGH (ASX) Ann: In Principle Conditional Settlement of Hall Proceeding

Originally posted by DoesItMatter ↑

The MB Class Action(CA) were after $250m. SGH just settled this and ALL other CA rolled into one for $36.4m. $32.5m is from insurance, and $4m is from SGH's funds they were just granted in June.

This is good news because, as per the announcement, SGH admit no fault and no one else can raise a CA about this issue. The CA members get peanuts after legal fees etc. It has now removed all pending bad news for the company. ASIC investigation is gone. CA's are now gone (upon approval). We are going after Quindell for all the money back. We have our own CAs for places like Manus island. SGH did not get liquidated and were thrown a lifeboat by Anchorage.

As dannyleb said, the wheels have begun to spin again. There is light at the end of the tunnel.

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There are a few opinions here where are factually incorrect:
- This has not removed all pending bad news for the company. We still don't know if the company is cashflow positive or is making a profit. Also, the recapitalisation has not been approved yet.
- "We" are going after Quindell. The Quindell/WTG lawsuit has effectively been ring-fenced by the new owners. So the current shareholders (the "We", i assume you mean) will see no benefit of this.
- CA for places like Manus? This is immaterial and irrelevant - this is BAU stuff for S&G. Although it would be nice for SGH if there could stop the revenue decline.
- The lifeboat from Anchorage? You may want to read the recapitalisation agreement and the HC thread about it. A 96%+ dilution is not a lifeboat.

This announcement has no material effect to SGH - it was always going to end one of two way, either going to court for years, or payout from insurance. The insurance company has rolled over (for the "unexpectedly low" insured amount) and the new owners have played their hand perfectly (as well they should, they are the experts on this after all). If you are a current shareholder, you should take note of this play by the new owners - they are three steps ahead of everyone here and know exactly what they are doing to maximise their profit.

The current share price (of 7.8c) values the new company at about $680m. And remember all the downsides to current shareholders regarding the new Warrants and Convertible Notes.

This announcement is good news for Anchorage and its partners. The current shareholders position is unchanged from last week - still in a boat, on a river, with no paddle and not knowing what is around the corner.