Ann: Suspension from Official Quotation, page-331

What had previously been mentioned regarding Manchester concerned the possibility of making up to 50+ staff redundant. In the context however of SGH growing from Jun15, when its employee numbers totalled 5350, to 5500 in Dec15, the concept of materiality fades away. Employment numbers would need to reduce by 150 alone to bring them back to the Jun15 levels. Manchester may very well be impacted but this alone would not warrant a VS being in place at this time.

So, in repsonse to your 3 points:

1. Likely, but not Manchester alone and not limited just to the previously flagged 50+ referenced number from January. Equally, it is clear that between January and now, nothing yet has actually occurred.

2. Material items not yet finalised. Certainly, these would be a possibility but it wouldn't just be limited to this. The flow on effects extend then to net equity in the Balance Sheet, revenue impacts (via WIP provisioning /writedowns, etc), P&L broader impacts, gearing ratios (certainly uppermost in Skippen's mind even if not so with the banking syndicate), changes to the banking facility going on, management changes, wider OPEX reductions, etc. In other words, a wholesale business reconstruction exercise.

If however Chanticleer is correct in its summation (ie: that all of the PSD goodwill might be impaired, etc), then the flow on effect of this would also impact against the holding values for WIP, receivables, etc. Then there is the business deterioration effect /impact from UK (clearly in November) and whether this might require rebalancing of UK WIP, receivables, etc. The same also applies to AU.

Putting this all together would then point to net equity reducing from $1.434B at Jun15 to $434M at Dec15 if the $1.0B in reported goodwill was entirely written off. Then there is a further $500M in WIP and Receivables to consider and that's before you start considering the wider UK and AU stale /stagnant WIP position (+ Receivables).

Now, that is if Chanticleer is correct, but if so, then the gearing ratio would be upwards of 200% or more which would certainly trigger a draconian response either by the banking syndicate or at its direction, in terms of what would then need to be done next.

Quite clearly though, the significance of the looming writedowns will now likely dwarf anything that has been routinely considered here (ie; in terms of approximate consensus thinking, etc). That is, they are going to be large but to what extent, no-one can yet be sure including quite likely the banking syndicate itself.

3. In that same article, the Manchester employee mentioned meetings for Friday (the 1.10pm post). There was however also the counter insolvency speculation comment made in a separate post at 6.25PM: