What a deal for KS,sell Westrac for 2b(1b equity & 1b debt) and access the 1b cash sitting on SEV books for whatever purpose ie.to pay off the debt within Westrac or splurge on other investment opportunities and still maintain full control.
Conglomerates under the one umbrella like FCL/ELD,ION,NLX, don't work anymore post GFC, because of the large requirement on cash flows to sustain the business model going forward and the inability to get access to cheap capital on the wholesale money markets like it once use to be. THOSE DAYS ARE DEAD AND BURIED.
The deals and structures all have the same unfortunate ending for stakeholders,and mining booms and busts are part of this country's long history.
KS painted a rosey picture of the mining sector outlook and is now making the new entity SGH with a 'major' focus on the mining services sector thereby significantly altering the risk /reward that some might not feel comfortable with.
Todays SEV & SEVPC share dump might in part be due to that change in risk profile and the uncertainty that the new entity SGH brings and the real possibility that the kitty will be bare once its raided by KS & Co.
I just wonder what Mr Rupert Murdoch thinks about this deal?
SEV Price at posting:
$6.98 Sentiment: None Disclosure: Not Held
