SGH is a mess - what a disappointment, page-31

Yes, there are wiser people involved than either you or I, but last night, some of them tried selling a lame duck to the banks and the banks didn't buy it. ABL (let alone Moelis) therefore will have to go back to the drawing board on this, including from the perspective of the banks not taking a haircut of any sort, especially if Grech, Fowlie, Skippen, et al are all allowed to remain intact.

Let's however just say that the banks were to buy into this, they would have to take a hit on their own balance sheets, and very likely with their own market caps, etc. So, why would they offer any favours to SGH?

More likely, if there was any DFE, the banks would be either requiring a very steep discount to current, or alternatively, be issued with forward scrip cover (ie: 2:1 new shares for every $ of debt retired, etc). But even so, this would sitll only get you over the existing debt burden hurdle. There would still be working capital to finance, for which SGH is currently skating by on the whiff of an oily rag. Put into some measure of context, about the only way in which any of this happens is with a considerable working capital buffer in place and that suggests the requirement of a new $50 - 100M facility.

So, no, I don't think that your idea even remotely works. Especially, not on the numbers presented, or the discounts offered, or the time pegging for those discounts to be applied.

Once again however a bigger question persists, right here, right now, and that concerns the timing to payroll, as to whether it has already happened, is about to happen, or is looming up towards month's end, or what?

Going forward, expect a far more serious severing of OPEX. This is what the banks will be demanding, with head count to seriously be cut back on. Perhaps better then for the RCVs to be called in.