Taboon - I think it is some of the shareholders rose coloured glasses about the future that are being effected. Did you see EIM Capital interview on Switzer? The Fund Manager was saying that they would have liked .70 on a derisked basis. BUT, in reality the requirement for over $6 Billion to develop this project made it very difficult. SDL is in a foreign land, dealing with two countries that have little or no experience in these matters, needing a truckload of money to make things work.
If you are referring to "bought at higher prices" - that I take it would have been in the last cycle with less shares on issue. Did we top up later when further shares were issued? That is what you do to maintain equity. If we are talking about the last cycle then as I remember we had around .60 for a very short time.
Why is there an assumption that the JV partners were not real and a deal not imminent? Disclosure in commercially sensitive. Do we expect a list of "here are the guys who came close but didn't get across the line" Seriously? They couldn't even if they wanted to.
Mate - I think this is very simple. SDL has been trying everything to get this major deal (This is Cameroons first major infrastructure project!)off the ground. Things change (I liked Bobby Skilton in a recent radio ad saying: "You can play a great game but you cannot predict the score at the end of it) and the power here rests with: 1. The Africans who will grant permits/conventions IF the ball rolls their way. We can jump up and down as much as we want and strategise until the cows come home but if they are influencing who the players should be, then they make the call. This is their land and they have equity in it. 2. AS GJ said, Hanlong were the ones who put their money where their mouth is. They have written a cheque and will write an even bigger one to get things going. The Africans will not wait around for ever. Remember the 2014/2015 timeline target for 40% self sufficiency.
This is not about paying management to "sort it out" and if things don't turn out to your advantage you go on a witch hunt. Anyone who has been in business or a serious investor over time understands that these are delicate situations and you can only do what you can do.
Also, people need to read quarterly reports as a review of that period.
I am sorry that there is disappointment, I don't think anyone (including SDL management) is jumping up and down with glee. BUT, in this market, getting $6 bill investor onboard is a remarkable achievement.
Re your last comment - "the deal erodes the long term value for shareholders" - if no one comes up with the money it will be plots of land with a few hundred holes in them. There is no future.
SDL Price at posting:
43.0¢ Sentiment: Hold Disclosure: Held
