Ann: Becoming a substantial holder, page-10

Hi Sabine,

I don't feel qualified to say much really, sorry. I have no idea about any upcoming takeovers/mergers except as I've said that when things are going well, unexpected other good stuff often happens. FWIW, my original point was that from the menu of possible factors that might impact the value, I feel that debt slipped off the list some time back. Margins followed by unexpected contract problems are the key risks now.

WRT debt and funding generally, I think:

Broadly, it seems that mining services companies that were attractive to banks during the boom, became less attractive when they 'became' risky in the bust. I don't see that relationship becoming as cosy again for a long time: the debt covenants were the very thing that nearly dealt the death blow for many. So I think we are looking at notes or equity for any cap raising I'd guess.

The most important thing would be what any 'partner' organisation might bring to the table (how big they are, their debt profile etc).

My 2 cents: If a merger/takeover proposal arrives, regardless of funding I would be shocked if NRW holders do not fare well - given the company's position of strength. The only potential risk would be an overpriced acquisition NRW which I think is a low risk based on JP and the board's experience/track record.

It would be nice to hear Paradice's investment 'thesis' in a few sentences just in case it contains something we're not focused on already. FMs like 'second order' ideas that the market doesn't see yet.

Best,
pb