The Investor Presentation gives a much clearer picture of the strategy that SAV are proposing. Their strategy appears sound but challenging. Some issues will be:
a) Reducing the overheads to a level that the ART business can support is critical. This will probably take some time and require some restructuring cost. i.e.: Reducing staff levels and getting out of any commitments.
b) They are hoping to sell the new Cencorp shares to pay down debt. Cencorp is a small thinly traded company listed on the Helsinki exchange. It may be difficult to sell many shares on the market without pushing down the price significantly. They may however be thinking of selling the shares back to the CEO's company Savcor OY, as he already owns about 62% of Cencorp?
c) Although the strategy will reduce exposure to the Chinese Yuan, it will create exposure to the Euro through the Cencorp Shares. (until they can be sold down) I am unsure whether a Yuan locked to the US$ is better or worse than the Euro at the moment.
At least the company now has a strategy and objectives to work towards. In my opinion the underlying ART business is sound and if they can sort out the cost structure and financing, and offload the Cencorp shares at $A issue price or better, this can be a nice little company that has good growth and recovery prospects.
----------------------------------------- I am not an advisor. My comments are for debate only.
SAV Price at posting:
9.0¢ Sentiment: None Disclosure: Held
