WSP Holdings, Ltd.

Sell Price: $3.60

On Wednesday (11/26) we sold our 1,450 shares of WSP Holdings Ltd. (WH) for $3.60 per share. Our initial purchase was at $3.48 per share in May, and we received a $.45 per share special dividend in late June. Including the dividend, our IRR on this investment was 32.94%. We feel fortunate to have made a profit. During our holding period,WSP's business has deteriorated substantially, resulting in a recent quarterly loss. The company is facing large tariffs in the North American market, downward pricing pressure resulting from a glut of supply in the asian markets, and general declining demand. Due to rapid expansion and facility construction, the company's short term debt has increased substantially and is sitting at $500M as of September 30th. While we don't question the potential upside of an investment in WSP at current prices, we feel that there is far too much uncertainty facing this business to justify our continued investment, especially where we can exit with a modest profit.