I'm absolutely amazed with what I am see coming out from both our company and SGH!
So here's why my decision isn't going to change...
1. SGH wants to get our assets on the cheap. No matter what they say SGH are only paying us $27m and their investment in the bridge facility and long-term facilities were to give them first crack at our assets. We don't see a cent of it! SGH say they are paying over $440m, but $120m is for Longtom, $60m for ES and $55 million for Crux because they expect to make good returns on our assets. Again we don't see a cent of it. In fact, it will just insult us even further if we see them make huge returns from those investments having picked them up for a lousy 2 cents a share! So in summary, they aren't paying us that money and they ain't gonna get them cheap at my expense!!!
2. The prize is clearly CRUX. Otherwise, why keep saying we don't care, but we continue to receive these threats that they're going to walk away. I think we've made our intentions very clear!
3. The only way SGH can guarantee to keep CRUX is to buy out shareholders which is why they are pushing so hard to get us to capitulate. Other than the tax losses, the whole of company is what they really want.
4. In administration, SGH cannot buy CRUX for next to nothing because it becomes an open market and Shell and Osaka have pre-emptive rights. So SGH will need to put in a competitive bid and still there's no guarantee. So they need to buy us out!
5. As Dr Phil's excellent analysis alludes to, it doesn't take many extra $m's until the return to shareholders becomes positive. I'm willing to take that risk and I still believe we've always had a good stable of resources, just never had the right people that can realise them. Except for RC for a very short time.
6. For management, selling out to SGH allows them to avoid being held accountable. There is no way I will allow that. I believe management are culpable. The company's cash balance and cashflow profile has been critical for some time. It doesn't take a genius to work out that we were always going to be vulnerable without a sufficient buffer. At the end of the day, the principles are no different to someone who can manage a household budget. Scheduled income and expenses, capital purchases and a buffer for any hiccups. I've made my views known before about this topic before.
7. In administration there is the opportunity for shareholders to become unsecured creditors if the directors and management have not behaved appropriately. You can have a look at this website about the history of previous administrations and the reasons when shareholders have successfully claimed against the company and been admitted as unsecured creditors:
You can also have a look at McGrath Nicol and their various administrations and have a read of some of the administrator's reports which give you a much better insight as to how a company was run and what really caused the issues and when.
As previously stated, this is my reasoning and everyone should make a decision based on their financial circumstances and objectives.
But I've had enough of 7 years of broken promises and I want answers to many questions I have about why decisions and changes of strategy had been made. The administrator can also make public internal information and material that we will never see if SGH picks up our company. The reading of the internal fractions between RC and the Board will make very interesting reading and I'm sure answer some questions as to why we are in this predicament!
Continued thanks to NBT and DrPhil Bartlett (sorry Dr Phil for not obtaining prior permission, but you do deserve credit for the analysis you have completed to date) and you both will have my full support in administration or other form as we go forward! We don't own a lot of shares in the scheme of things these days, but the amount we paid, like quite a few others on this forum, make us value wise amongst the largest shareholders.
As for me and where I stand right now, I have no doubt whose interests management have and continue to act in!!!!
Arobert
NXS Price at posting:
1.7¢ Sentiment: Hold Disclosure: Held
(20min delay)