NZ Shut Down Upside

Least in short term, shutting down NZ looks to have huge upside. I’ve dug deep for ‘the basics’, but figures are from memory and approximate. My recent experience in NZ demonstrated a challenged consumer, with cost of living trends being undesirable. Most matters are specific to Svr however as NZ is/was more an immature business in many ways.

So Svr acquired its buss for 14+ million NZD (50 million loan book).

At its peak, Svr appears to have ‘speed limited’ its loan book at under 220 million. The loan book appears to have been in ‘run down’ well prior to the formal ‘August’. My understanding is loan book would be about 100 million now, with cash coming out, about 60 million a year.

At it’s peak, it appears that 70+ million of Svr’s cash was used, I assume for regulatory purposes, as a finance buss domiciled in a region (and loan collateral).

In Aus, with a more desirable market, in a better part of economic cycle as well, Svr loan book is apparently 803 million, with 589 million of drawn debt.

As a smaller finance entity, with some legal stuff happening and buying back stock, shutting NZ ‘to the ground’ Is a no-brainer.

Greater management focus….Aus has huge scale compared to NZ for Svr……Simplified capital structure….The list can go on.

The only exception logic is that Svr can go back to NZ, hopefully when much stronger, and do things with more scale and/or comparative advantage.

As a potential ‘special situation’, shuttering NZ appears similar to when an entity sells off a loss making division. It’s a common circumstance of under-valuation. However, do your own research. I have my own thoughts on what exactly drives Svr’s share price, in a chart sense.