Ann: Market Update Amendment to Syndicated Facility Agreement, page-220

Disappointing. Is resorting to questioning motives just a way to avoid answering the tough questions?

You promised to keep me honest - I promised to keep you honest.

So... here's that question again:
If you have sustainable future earnings why would you require 40m additional borrowings for working capital and the capitalisation of 32m interest?

Would your earnings not pay for these things?

Notice I removed the part that was just an opinion because we also agreed to stick to the facts.

I have an additional follow-up question - bit more personal.

At any stage do you ever consider the possible merits of opposing viewpoints? Do you ever stop and think to yourself, "hmm... maybe they have a point here - let me double-check my assumptions?"

I find it a worthwhile thought exercise - even if you ultimately determine that you're very comfortable with your position - at least you've checked to be sure you've considered all possibilities.

When Rosencrantz floats a possible recap plan, I think "wow! That might work..." and I crunch the numbers to see whether it's feasible - and I'm almost always beaten to the punch by Grant or Voost or Nick. When you ask how I come up with "top dollar" valuations, I do my best to explain my thinking and in doing that I try to consider how you or others arrive at different valuations. As we've discussed, I think you're being overly optimistic, but I don't discount out of hand the possibility that you might be right. When Krispy suggests forgiving $500M of debt will magically add $1.955Bn to the current market cap... ok, sometimes when Krispy posts I don't need to get out my calculator... - but you get the idea.

Entertaining opposing view-points helps to expand the range of possibilities I can see. It's all a learning process for me.

Anyway - I would not short SGH - I confess that I wouldn't know how to short it - and even if I did, I wouldn't. Too many variables at play and possible outcomes to predict if it could fall further from $0.13 or if the recap plan will put a rocket under the SP. It's a risky trade on either side and I admit to a grudging admiration for those brave enough to risk either a long or short trade here. Too hot for me.

Happy sitting on the sidelines and watching with interest for now.