Compelling case for an investment., page-25

OK, I was referring to a full receivership scenario, where I would have thought redundancy costs (per employee) would be less than under the current "right sizing" scenario, though obviously a lot more in absolute magnitude.

And yes, I too have concerns about what, if anything, would be left over in a receivership. But I don't have your experience or knowledge on this. Apart from your stated concerns, the receivership scenario looks particularly tenuous because the ratio of possible realizable value on assets to the liabilities, is very close to 1. This means that it is hugely sensitive to the recovery rates on the elephant-in-the-room (rental equipment).

To illustrate this point, below I am assuming three different recovery rates on rental equipment, each resulting in vastly different net liquidation values. Here I am ignoring lease liabilities, but I am putting in a plug for staff job losses to the tune of about 8 weeks pay (I assume that other entitlements, such as leave entitlements etc, will be covered by existing provisions on the balance sheet). Also, this is based on FY2015 accounts, which may make it additionally non-conservative (so I stress, this is just to illustrate the sensitivity to rental equipment recovery rates).

	Column 1	Column 2	Column 3	Column 4
1		scenario A (recovery rate)value $m​	scenario B (recovery rate) value $m	scenario C (recovery rate)value $m​
2	cash	(100%) 7.0	(100%) 7.0	(100%) 7.0
3	receivables	(75%) 30.5	(75%) 30.5	(75%) 30.5
4	AHFS	(70%) 6.2	(70%) 6.2	(70%) 6.2
5	rental equipment	(20%) 47.1	(35%) 82.2	(50%) 117.4
6	other PPE	(15%) 4.1	(15%) 4.1	(15%) 4.1
7	total realizable asset value	94.7	129.9	165.1
8	total liabilities (per book)	116.9	116.9	116.9
9	employee assistance	16.2	16.2	16.2
10	total liabilities	133.1	133.1	133.1
11	Net liquidation value ($m)	-38.4	-3.2	32.1
12	Net liquidation value, per share (c)	-8.1	-0.7	6.7

Not too enticing!