You are conflating book value (which is somewhere around -36c...

You are conflating book value (which is somewhere around -36c per share) with market value (which is currently 9c per share or $32.06M). The company would be unable to be properly valued on the ASX using it's "book value" - because liabilities exceed assets - and share prices cannot be negative numbers.

You missed a couple of things from your list of things that would also be under consideration in the current discussions:
- Debt in excess of $800M, exceeding the equity value of the company
- Debt is owned by hedge funds who are in this to maximise their returns first and foremost.
- Cashflow negative, and now operating solely at the discretion of the lenders
- Declining revenues
- Declining margins
- payments due in this FY to previous owners (Nowicki, STOB etc.)


And of the things on your list:
- performance improvement was supposed to be mostly complete, yet margins remain negative.
- escrow - no claim has yet been lodged and Watchstone have indicated they will oppose it if it is lodged. It will be litigated for some time and therefore any potential proceeds are not guaranteed, and so far off in to the future they will have no bearing on the calculation of any future value
- possible lawsuit against Watchstone / purchase advisors - is pure speculation on your part - and again - even if it happens, it involves litigation, no guarantee of success, and will be too far in future to help
- CA against Volkswagon - sure, maybe - but 65% of the lawyers fee component will go to the litigation funder, leaving 35% or a few million quid for SGS - this is again not guaranteed money that is coming in tomorrow - it's "somewhere over the rainbow" money that will arrive too late.
- NIHL - hasn't delivered anything in nearly two years. Why will it magically start producing cash now? And if it did all of a sudden become a cash cow, I suspect given the fee-sharing arrangement that Watchstone might start making lawsuit noises against SGS UK themselves, don't you??
- other... if Grech is promising "other", then based on past performance I will choose to take that with an extraordinarily large grain of salt!

You can be as patient as you like. But keep in mind that they are cash flow negative. So every day that goes by means more money flows out the doors of SGH and the need for a further cash injection creeps ever closer and closer.

Put simply - time is a luxury the company simply does not have any longer.

SGH need the deal done ASAP so they can stem the bleeding - which means none of your "white knight" rescue packages (escrow, Watchstone lawsuit, NIHL, VW, Manus, ...) are going to happen in time. I'm sure the new owners will be very happy when they do eventually come through.


If you think based on the above that current SGH equity will be valued at any more than a token amount by the lenders in any D4E deal then I'm afraid you are about to get a lesson in "Dilution 101" from your friendly New York hedge fund.

Brace yourself!