Not a bad play for a short term bet I thought.
The earnings covenant was clearly flagged as being breeched if the sale didn't go through before year end and in this climate always on the cards. What is the bank going to do about it?? Make them sell assets to pay down debt and ramp up production and make some money finally from the upgraded plant ... lol. The bank chat is a formality and they will do nothing and give the company some more time to finalise the sale.
The real question is will the sale actually go through or has it fallen over rather than just been delayed? Share price action was relatively boyant up until delay announcement I thought, which indicates the insiders think the sale was still on. Risk-reward looks alright at these prices (though can always get cheaper of course) gambling on the sale actually going through in the new year. Will not recover until it does IMO.
goodluck
Add to My Watchlist
What is My Watchlist?