Some of the general issues as I see them.LegalIf the litigation...

Some of the general issues as I see them.

Legal
If the litigation by these legal ambulance chasers is successful it won't end there. There will be subsequent actions by the company against their auditors and also against the previous directors responsible for the demise the company got itself into. Thus this could all take years to resolve. Thus the amount of compensation the company might be liable for could be minimal as the current directors will also have their liabilities covered by insurance. Just because there are large funds available doesn't mean the payout is higher. Any one in the action would only get their so called due entitlement.

The $1.5b in the bank. What to do with it?
The mere fact of reducing this sum (considerably) by share buy backs or dividends could have some unexpected flow on effects. First the SP of Sandfire would be likely to fall - ie now not enough funds to proceed with any further acquisition, so the tension goes out of the SFR SP. The dilemma then arises that SFR with a lower Sp becomes attractive again. Equally I suggest any other hopeful Cu companies who may have been eyed off by OZL their Sp would also fall as they also go out of the game.
So for me the preferred course of action is do nothing with these funds and just wait for a market correction - these do occur often enough and then make a pounce. Don't forget this cash must be a nice little earner in its own right pulling in about $100m a year.

cheers

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