Dear Incompetent Management, page-3

Far more astonishing than I think you realise. Not for the reasons you think either. There is a very valid reason investors are leaving and I'll try my best to explain it below.

They did issue a statement regarding revenue at the agm. $70 mil a month average so far. That's gonna mean revenue is down $100million if it continues through to year end. This has more consequence than just pushing down earnings.

The issue I'm having and probably others is how this bodes for their debt issue. They are only just above the net debt(400mil)/ ebitda (140) covenant at 2.88 vs required 3.5 (was 2.5 but already got leeway from banks) If revenue falls $100 mil as kinda outlined in their presentation by the order intake slides then profit should fall at least $20 million to 120. This puts the ratio at 3.4 or touching the receivership break point. Any slight change in the numbers above and your shares are worthless (I've learnt this the hard way). They might not go under. It is possible but not probable.

if they don't go under then it's still not roses. whoever owns the redeemable shares will own most of bradken as they will redeem the 70 mil at $0.50 for 100 million shares or 30% of the company. If the price falls further they'll get more this pushing the price lower in itself. Given how close bradken are to the covenant they can't buy the RPS shares either.

In summary, despite not outlining it to you clearly in the AGM slides, bradken are most likely to either enter receivership or give a very large portion of the company to their old mates for next to nothing. All the bankers/ funds know bradken is very close to receivership and many are choosing to take their money now. These are smart people deciding to leave, smarter than me.

I think it is at a point where it is almost worth gambling some money on because a slight change in revenue might make a decent return but given what I've said above and my aversion to gambling am currently leaning away from it. I still hold some because I feel like the current price is undervaluing the risk but I know I'm probably wrong and my emotions are probably getting the better of me.

remember the above is my opinion of Bradkens situation and not financial advice.