Ann: Quarterly - earnings guidance downgrade, page-3

Their reporting is also disingenuous and leaves a lot to be desired.

They report cash on hand for the parent entity as required in annual reports, but they seem to be reporting total cash on hand, including cash in non-wholly owned (JV) subsidiaries (on a pro-rata basis). This makes it seem like they have 26 million cash available, but in reality it's closer to 8 million (which is relevant since the parent entity has a close to 60 million debt which will come payable when the court case is soon rubber stamped). Payment terms for it, are still subject to change, but it's likely L&M will push hard to receive compensation which they've been due for years, as ealry as possible. This means, they still need to build a cash position of 52 million more by Mid FY22, or they're going to come shaking their tin to shareholders, and things will get ugly.

I get why they report it that way (since it gives investors an understanding of the cash position of their underlying companies), and in normal companies, with no massive obligations coming to the holding company, that is fine, but they should state, what amounts are actually accessible to them at need, and what is accessible only through agreement with JV partners. I doubt they can pull cash from their operating JV's to pay the fine.

Also curious what comes of the second case, they show confidence, but they did the same in the first one, and we know how stupid they were there. If L&M are confident enough to bring a second case, I think it's worth pegging as a big risk. Looks like L&M want to push these guys to bankruptcy and take them on the cheap perhaps (since they're the creditor, they don't have to worry about the debt they'd owe on acquisition).

Similar thing happened over at FAR, though that was precipitated by a collapse in oil, rather than a fraudulent board of directors. Unfortunately, they seem to be getting a fraction of the value of the asset.

DYOR