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54.5¢ slater & gordon limited

Lenders force SGH to restructure, page-208

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bensterz

1,787 Posts.

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02/02/16

10:52

Post #: 16920457
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Originally posted by Melrosian ↑

Bensterz

Your post demonstrates that you have not quite twigged that QPP is not exactly a legal business. ( Well HL claims are but Motor Claims largely not) It is batch processing legal claims and by economies of scale it takes a huge load from insurance companies.

Dismantle QPP PSD piecemeal and it would be a bit like taking a huge weaving factory and instead sending tubs of yarn to cottages up a glen so that cloth was made on a handloom. All the efficiencies in process would be lost and insurance companies would tear their hair out.

As Grech has noted. QPP had/has a superb business model. HL claims quite another matter and if someone could make them dissappear quicker ( than 17 months) then I you and the SGH management would be chuffed . I suspect SGH has arranged part of the lending
to finance WIP for HL. That finance and the WIP to do with HL will be history in 18 months. If indeed there is to be any restructuring , it may be that some way of offloading cases can be found.

Apart from anything else , half of any profit made from HL claims goes to WTG, so it is a bit obvious that SGH might be prioretising
anything that gives them all the profit not half the profit. A restructure that gets rid of HL quicker might be a good thing. The expected $40 m profits from HL fro SGH might be more trouble than it is worth.

You will understand that as I am also a WTG holder, compromising my return for HL claims might not be pleasing for me and other WTG shareholders. As I have said before, WTG shareholders SP is about 1/3 of cash and assets. Mutual interest and mutual cooperation possible? WTG have lumpy cash and there is the escrow account. As I have said before , acquiring Howard ( former Tory leader and a QC) as a NED might be useful with most profits now in UK.

I get the feeling most OZ shareholders dont see the ball at their feet in the UK. Pity. The opportunity isnt small.

Mel

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The law firm I liquidated dealt with a lot of small insurance claim work so I know what I am talking about. The insurance companies were the first to move all their files out when the firm entered external administration.

SGH Price at posting: 57.5¢ Sentiment: None Disclosure: Not Held
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