Russian Billionaire Eyes Sundance !, page-105

For clarity this is my simplistic assessment of a SDL noteholders position as expiry approaches:

1. Seek repayment of the debt.
SDL does not have the money and can not get the money. SDL would immediately be technically insolvent and the Directors would be legally required to place the company into voluntary administration (I discussed this concept 2 years ago and understand the only reason SDL Directors and Auditors have been comfortable with current position is they hang their hat on the ability to defer repayment). The administrator would take control of the assets of SDL and seek to resolve the insolvent debts. This could only be achieved by a sale of the Project. In the current market it is impossible to envisage any significant value being generated by a sale (Exxaro recently sold their Congo iron ore project which they had invested more than US$500 million into for US$ 2 million). So the administer would either need to negotiate with Note holders (and the "s" is significant - there are a number of different parties) a deed of settlement or asset for debt swap. Tough to see how this could be achieved and how it would generate any value for noteholders who would then need to set up a management structure and run the asset. None of the note holders have this capability. So the Administrator would most likely have to place SDL in liquidation. Game over.

2. Extend the expiry of the Notes.

3. ?? There is no other option. Is there?

Now Westcott, please explain to me and Piste why taking option 2 above is possibly a "vote of confidence"?

J9