Positive Free cash flow sits on the balance sheet as equity and builds up the more cash that is generated.....assuming it's not paid out in dividends, which in this case it won't be.
So using a mix of debt and equity is the same as using debt and cashflow......a capital raising is clearly not required and it's clearly outlined when the analyst discusses the potential gearing ratios on the basis of how much debt will be required. It's also clear that with free cash flow exceeding US$100 m from 2020, both raising and servicing the debt component is unlikely to be an issue, it's always much easier when you are actually generating positive FCF rather than promising.....
NUMIS is a highly regarded firm in London and it's very interesting that they have commenced coverage...
The disclaimer regarding preparation of the material as marketing is pretty standard PC BS with most research/stockbroking houses globally now.
AVB Price at posting:
7.3¢ Sentiment: Buy Disclosure: Held
