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  1. 206 Posts.
    Adam,

    A quick question if you can.

    I can see the employee expenses/ Revenue % goes up again in DH15 to 53% and I think the reason is that revenue is falling faster than the expenses cut. By reducing more cranes and heads, revenue will just simply fall further.

    What do you think the chance the management will start another capital raise to help reduce the debt and get rid of the banks?
    If the chance looks low to you, why?

    I deep dived in a case NWH since last June and I missed the chance when it fell to 5 cents per share. When look back, I thought I should bought in strongly! But unfortunately I didn't do so.
    Market by that time seemed very much worried whether it could survive the debt which had already been assured by the management many times that it was properly restructured with ANZ but Share Price just kept falling.
    And then I saw in Nov 2015 one of the company non executive directors bought in around $40k worth shares. He is a charter accountant. He might not be as astute as a professional investor to choose a best time to jump in but I had a very strong feeling that he as an experienced accountant should at least know very well whether a company would go broke or not. That insider action may seem unreliable to many but very reliable to me especially that amount of money is a significant part of his salary as a non-executive director. I didn't buy it simply because of the lack of experience and the fear to bet on this kind of deep value stressed stocks.

    After I read what you wrote, I felt sth like NWH comes up again. It seems it could survive the debt so clearly as it has been successfully reducing it since 2013 but if it reduces debts further, it has to sell more cranes which could further deteriorate the cash receipts and very bad for business. There is a point that it just couldn't reduce cranes any more.

    I appreciate the risk-rewards but I wonder the chance it might go for another capital raise. What's your opinion?

    Many thanks.
    Medici
 
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