Comvita - CVT

[Dassets]

I would think the bank will require full repayment. So a cap raise of epic proportions especially where the share price is going. It basically is a wipe out of existing equity holders.

[Ogg]

I would think the bank will require full repayment.

I'm thinking this is probably more likely. Hence why they haven't said how much and also why it's an a renounceable raise. They are trying to see how much they can raise then will probably get the rest by a sub prime lender.

[Balance]

I would think the bank will require full repayment. So a cap raise of epic proportions especially where the share price is going. It basically is a wipe out of existing equity holders.

Unless existing equity holders participate fully in the capital raise.

But why put more money in a business which looks completely screwed and now, out of favor even as a takeover proposition if it gets cheap enough?

Heck, Cerebos takeover offer all those years ago looks very generous now - because of the gross mismanagement by the idiots running the show.

[Balance]

I'm thinking this is probably more likely. Hence why they haven't said how much and also why it's an a renounceable raise. They are trying to see how much they can raise then will probably get the rest by a sub prime lender.

Yup - can't say because they are still negotiating but have no choice but to report as reporting deadline up.

[Ogg]

Yup - can't say because they are still negotiating but have no choice but to report as reporting deadline up.

It might be because of the coronavirus. The bank probably wants to reduce it's risk to this. Probably did a review of it's accounts recently, then saw Comvita large sales and exposure to China and probably decided to terminate the loan agreement. Things have moved very fast, that's why it's all been rushed through now with little detail.

[bottomfeeder]

Never really understand why public companies hold long term debt. Ok they base it on return on capital. But they have access to capital raising. Its not as if they never have to pay it back. I say cease dividends and raise capital to repay all debt.

Now you might argue gearing helps you make more on the existing capital, but is that really the case.

[Ogg]

Such little turnover for a major announcement. Bizarre.

[Lease]

Cut loss and move on.

[Balance]

Cut loss and move on.

There is absolutely no reason imo for anyone half-sane now to buy the stock as the share is essentially cum-capital-raising of a indeterminable amount yet at a price which will have to be very attractive to underwrite for the brokers.

The time if anyone is interested will be during the capital raising.

Those of us with long enough memories will recall Fletcher Forests with its infamous 2 for 1 rights issue at 25c when the sp was 76c! And that sp had already fallen from $1.10 as rumours of the capital raising leaked out.

Only salvation for existing CVT shareholders will be a takeover but if that was going to happen, it would have by now. To think the sp at one stage was over $10!

[Beagle]

Suspect bankers will want a meaningful reduction - say $93m to $50m, so $43m capital raise.

Underwriters are going to want to get the capital raise away at as a cheap a share price as possible so realistically, around $1.50 to $1.70 per share?

Meanwhile, the financials look really really sick if you take a closer look!

Gross profit increased by $8m but -

- selling, marketing & distribution expenses increased by $13m, and administration expenses by $2.3m!

Going backwards big time!

No operating earnings to pay interest of $3.5m vs $2.7m in 2018 - even while debt is stated to have reduced! Does not make sense - can only mean CVT is paying penalty interest imo as interest rates have also been falling. Why I believe imo the banks want the debt reduced.

Real underlying loss was $16.1m - with an income tax benefit reducing the loss to what is already a bad number at $13m.

Good luck to holders!

Haven't had time to look but those numbers make this look like a fail of epic proportions. Why would anyone in their right mind stump up more money to throw good money after bad with their multi year history of tremendous stuff up's. You'd have to have rocks in your head, surely ?
Trying to raise capital in the middle of the virus scare and markets feeling real trepidation and with their track record...I predict a massive train wreck coming !
How many times have we heard them say we are confident of improved financial performance going forward ? Honestly, I have lost count.
You can only "cry wolf" a certain number of times before almost everyone says you're "full of it".