Shareholders can't ignore the ongoing erosion of shareholder returns resultant from NRW management choosing to continue to provide contract services when there is significant contract payment default, regardless of any payment security provisions.
After the Samsung "near death" debacle and subsequently Altura and Gascoyne/Spartan shareholders should not expect NRW Directors to go any where near a $100m plus debt to a recalcitrant proprietor in Sanjeev Gupta and a basket case business.
The problem is not due to actions by the SA Gov't or the Administrators, the problem is lack of business acumen of NRW management/BOD to allow the company to be this position in the first place. There is a lack of robust governance.
NRW Management was extremely lucky recovering the Gascoyne debt. However, the decision to sell the debt/equity Spartan shares during an equity raise was ill-timed and unnecessary as NRW's balance sheet was robust and all signs were positive for Spartan's future share price. If NRW had retained and sold these shares today we would have recovered $80m of the (113m) Whyalla debt, after fully squaring away the Gascoyne debt. A missed opportunity or a case of "leaving money on the table".
The $113m impairment has come straight off the share price today so the market has severely punished NRW for the Whyalla debacle.
Shareholders have not seen any improvement in governance post Samsung which leads to question the competency of NRW's BOD at the next AGM.
NWH Price at posting:
$2.61 Sentiment: None Disclosure: Held
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