another mbn?!, page-5

Hi furniture. The only thing I can think of is the dilution from the Blumont deal (284% increase in shares). The re-capitalisation proposal noted that there would be 1,392m shares on offer upon conversion:

http://hotcopper.com.au/announcements.asp?id=604350

I am presuming Blumont does indeed want to convert the shares to equity. So, @ 8c and 1392m shares, the market cap will be $111,360,000. DML will still have some debt (they currently owe $154m). However, Macquarie have noted the Blumont dilution, and still have a 1-year price target of 15c:

http://www.fnarena.com/dsp_recommendations.cfm?searchsymbol=dml

Given how Blumont have been able to renegotiate debt over time, DML may become a long story. As they repay debt, their market cap should go up, but as repayment is put out, the market must be relying on DML doing other things- the things all companies have to do- internal changes, corporate cost-cutting, etc, and external changes- improving the resource, etc. Most "rescue operations", by private equity and others, have to push management to change. I think DML need to up their disclosure to the market, but moreso, to make a radical shift in their operations. At some point, the company will be kind of reborn, but Blumont need to give them a real kick along, or they could stay in the doldrums. Up to the company now.

I don't know whether holders think it might be a good idea to change the price of the upcoming SPP- it could have further dilution, but if the price was more suitable, they would be more likely to get that money in the kitty- well-needed, that money.