just spent over 2 hours at the Sydney preso - I was very impressed with Anthony Tse - he took a lot of tough questions and handled himself very well. The whole gist was that he knows the money wasn't handled very well in the past and his first focus is getting on top of costs and reducing debt while at the production level concentrating only on Jiangsu - he admitted that they can't produce at $17k per annum currently - as they need around $5M to tweak the plant to ramp up at name plate levels. He said at the current pace he can confidently predict $10-12k tonnes. He knows it's a big ask for shareholders to stump up more cash - but he's confident in the company, stating he believes in the assets. He knows he's in the hot seat and he wouldn't have taken the job on if he didn't believe he could turn the company around. He said if the Koreans take up the option to go from 4% to 30% that's all well and good and they will have to back the debt for capex to completion. He said if they don't take up the option they are already in preliminary discussions with Chinese investors who may take up to 40% of SdV. Again he said Jiangsu was the main focus and SdV is around 5 years away from making money. A very important point was that he and Charles Whitfield both believe the major holders are taking up their full entitlements - so the minimum raising of $12M is all but guaranteed. They are in discussions with the convertible bond holders to either move to equity with 'a bit of love given from each side' otherwise to extend the timing further (they are up in November this year).
I really liked his focus on cutting costs and getting cash flow in - it's made me feel more confident that GXY can pull through. It won't be easy and it will take time. We shall see.
GXY Price at posting:
7.8¢ Sentiment: Buy Disclosure: Held
