I fully understand what the SGH released said, but to think that Anchorage will be playing "happy families" is just wrong. Make no mistake, they only have their own self interest in mind. Yes, they want to get a nice, happy and easy outcome for themselves (which is a listed company they they make a huge profit on), but they are not afraid to leverage everything they have to get the optimal result for themselves.
Without being too specific, I have over 20 years experience in Finance, 10 of that in international dealings in those that you have listed (to varying degrees). My experience is that it that, at the CEO-level, the discussions will not benign and boring - when there are 100's of millions at stake, those with the upper hand will turn the screws as much as they can. The lawyers and accountants will be crunching the numbers and contracts to come up with various scenarios and possibilities, but at the end of the day it is the CEOs that grind out the basic deal and I would not expect Anchorage to be kind.
Again, 12 months ago things were different and I would have agreed with you more. But currently I don't believe that SGH management have alot of bargaining power and things will change when this deal concludes. If (when?) the lenders get a majority of SGH shares, of course there will be changes on the Board, along with CEO and CFO changes. A new senior management team will also to implement cost savings, revenue generation and getting the business spinning again. It is just a business - it is all about numbers, people management and profit maximisation. With the sort of time and dollars that Anchorage are investing, you can be guaranteed that they will have a roadmap of where they want the business to go and how they want to exit (to profit). Changes and actions will start to happen quite quickly, but it is my experience that changes and improvements will take two years to get fully implemented and actioned, and during this time there will be plenty of ups and downs along with volatility in the share price.
Maybe my experience is different to yours and we may see things a bit differently, but we both agree there is alot of risk - you just seem to have a higher risk tolerance to me.
There is potential in SGH still, but I think that some people need to just be a little more realistic and measured in their expectations. There will be an outcome soon, but with Anchorage involved, I just see more risk than before. Happy investing!
SGH Price at posting:
12.0¢ Sentiment: None Disclosure: Not Held
