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.
The dilution to existing equity from the cap raising will be costly
Depends on type of capital raise (pro-rata rights issue, placement to selected institutions and investors or combo) and whether existing shareholders choose to fully participate.
IN any case, one look at the chart and it's stand aside!
Depends on type of capital raise (pro-rata rights issue, placement to selected institutions and investors or combo) and whether existing shareholders choose to fully participate.
IN any case, one look at the chart and it's stand aside!
Sp now $2.20.
49.6m shares issued - let's assume CVT needs to raise minimum of $50m to keep the banks happy?
So $1 per existing share to be raised.
So 1 for 1 rights issue at $1.00?
Now if the banks require full repayment - will have to be a 2 for 1 at 45c?
Certainly the underwriters will want plenty of margin of safety!
It was $13 not that long ago......and punters thought they were wonderful ....even though financials (especially cash flows) were sending out messages things weren’t that good.
”When investors are euphoric, they are incapable of recognising euphoria itself “
It was $13 not that long ago......and punters thought they were wonderful ....even though financials (especially cash flows) were sending out messages things weren’t that good.
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