$15.5m bought and sold today so far, page-11

Lefevre,

From the explanatory memo 10/12/10

Quote; THE TRANSACTION ALLOWS SIGMA
TO SIGNIFICANTLY REDUCE ITS
OUTSTANDING BANK DEBT
Sigma is currently required to repay its $340 million
syndicated banking facility according to the following
timetable:
■■ $30 million upon Completion of the Transaction;
■■ $10 million by 31 March 2011; and
■■ $300 million by 18 September 2011.
Sigma also has trade receivables securitisation facilities
totalling $750 million, $100 million of which expires in
February 2011, and $650 million of which expires in
March 2011, subject to certain conditions. Sigma is
currently in discussions with its lenders regarding the
extension of these facilities.
If the Transaction proceeds, Sigma intends to fully repay
the debt outstanding under its syndicated banking
facility, and to repay a significant proportion of its trade
receivables securitisation facilities.
Subsequent to full repayment of the existing syndicated
facility, Sigma intends to establish new debt facilities.
These new facilities are currently intended to be drawn
in the order of $150 million to $200 million after the
Transaction.

From the market update 28/2/11
Quote: Sigma received sale proceeds of approximately $900 million for the
sale of its Pharmaceuticals Division to Aspen. These proceeds were used to retire the
Company's syndicated debt facility of $325 million. In addition, the ANZ off balance sheet
debtors securitisation facility of $358 million was fully repaid in early February. This facility
has now been cancelled.
An amount of on balance sheet securitisation debt of $62 million remained in place at 31
January 2011. The Company?s net cash position after all debt repayments in early February
2011 was approximately $210 million
The Company is negotiating a new debtors securitisation debt facility of $200 million with a
term of three years. Credit sign-off, subject to final documentation, has been received, with
finalisation expected before the end of March

The total off balance sheet debt was $750m, and only the ANZ facility was expired. The remainder on balance sheet debt remaining seems to be the $62m. There seems to be no mention of the remaining off balance sheet debt. Very tricky accounting the off balance sheet debts/exposure.

This would leave approx $392m of off balance sheet debt floating in accounting land (original $750m - $358 (ANZ paid out.

The problem with public co's is that the accounting standards are different to what we associate with standard accounting practice.

As mentioned, the untold story (post sale) of the total off balance sheet debt is the only concern i have. (They have only accounted for the ANZ portion.) Otherwise, the cashflows generated from normal activities, combining the added product range from Aspen, the reduced interest expense, the change in accounts receivables, and the focus of management should provide a steam engine in the near future.