I am back. So is SGH, page-316

It's a fair point. However SGH may have little control over winning the Watchstone compensation - or even a massive turnaround in NIHL cases.

All SGH board can really do is make sure that the market is informed of future windfall revenue in advance of any recap deal - and obviously indicate what they feel is a reasonable / likely outcome - so that shareholders can make an informed decision.

If SGH was to advise the market that they expected to win $1Bn from WTG in any settlement, then I would expect the SP to rise markedly - and equally I would expect current shareholders would reject any token debt-for-equity figure offered by the new senior lenders.

The board would possibly even recommend shareholders REJECT the debt-for-equity deal in this scenario.

Of course, the new senior lenders might then demand immediate repayment of the debt (or technically they would turn off the money tap until SGH breaches their SFA levels and then demand repayment) - push the company into receivership - pick up the UK business in exchange for the debt that they hold - and STILL end up collecting all of the Watchstone settlement with current shareholders getting nothing. Which would suck - but would probably be completely legal.

Certainly an interesting scenario. Very hard one to predict how it will play out. If windfall revenue was literally just around the corner (ie. likely within 3 months), SGH management would do well to stall recap until it happens and use it to strengthen their position. This would be good for shareholders - though I don't think I would be counting on it happening. The fact that they haven't really mentioned it in any announcements or media statements thus far suggests that they don't see it as near term or likely enough to save them or impact recap discussions.

We shall see...