I think they could float off SGH Oz. It would have to be attractively priced. The proceeds in that case could be used to pay down debt. You could find yourself invested in the UK with perhaps an associated company in OZ. The value appears to be in the healthy part of the group.
If you consider the underlying debt after NIHL cases 90% at debtor stage as $550M then I think you could produce a business plan for SGS with say $150M debt.
If SGH Oz was left with $50M debt then the Oz float would have to achieve £350M
It is doable but not pretty. Turnarounds are often brutal and like that.
A scenario like the one described would rely on making some success out of the NIHL cases.
It would also need the SGS business model to prove itself ( net cash generative and profitable) in the next 13 months. If it is not squeezed too hard it should.
Put a decent plan together with achieveable goals , take the banks along on the ride, and it is conceiveable that there would be 2 entities worth investing in.
Mighty did say it might take 3 years but I cant see SGH rolling out over the UK and attacking new business segments for some time.
Mel
SGH Price at posting:
47.5¢ Sentiment: Hold Disclosure: Held
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