MFS might be able to service their debt, however the market on Friday was as much a response to a huge loss of one thing: TRUST.
NO COMPANY should be telling the market that all is good, and there is only a smallish amount of debt that needs repaying (and within their ability) and then go to the market to raise what at the time was around a third of their market cap and almost 4 times the debt to be repaid.
This would be similar (in scale) to a major bank saying "no issues here with sub-prime. All good". Then putting their hand out for a $10 billion rights issue without a totally coherent reason except something like "this will give us more flexibility".
It is simply TRUST. If earlier announcements re debt, ability to repay, EBITDA / NPAT projections ... are all correct then the company will go on - and should be worth multiples of the current SP. However it will take a LONG time for trust to be rebuilt, and just as long for MFS to get back over $4 where it was only a couple of weeks ago.
MJS
MFS
mfs limited
