Originally Posted by
Roger
Okay, i'll be brave for my first post, many would be too scared to weigh-in on this relativly heavyweight subject straight off the bat. First as a newcomer, let me briefly introduce myself.
Late 40's, an Accountant in practice, former investor in SCF, investor in the sharemarket for over twenty years.
The new appointments look good, as were the director appointments some time ago. Unfortunatly there's little question the SM of Mr Hubbard's interests has cast a dark shadow over SCF's future.
One of the key issues is how can investment advisor's now recommend clients invest in SCF given the on-going investigation and the fact that there was allready a significant degree of uncertainty hanging over the company before the SM action ? Of course that probably won't stop Forsyth Barr from clipping the tiicket, but its probably best I don't go there...at this stage anyway, Credit Sails, Feltex, need I say more ?
In my opinion, the liklyhood of SCF climbing the wall of maturities within its own resources has diminshed considerably which appears to beg the question, perhaps the Government might provide temporary cash flow assistance to bridge the gap, "too big to fail"
This may be logical as they're in it good and proper if SCF fails anyway with the key question can the losses be stemmed or mitigated by continuation of trading ?
Regarding the preference shares, I've thought about this long and hard and my conclusion is its only for the very brave. Given they're at a margin of only 2.5% over swap they were issued at a time when margins for this type of security were very thin, its seems most unlikely they'll ever get close to a dollar again, even if the company survives post the Govt Guarantee period which I think is extremly unlikely. At 13 cents on the dollar today with a maximum apparent upside of about 60 cents, that's one chance in about seven..., isn't that just gambling ?