So $45m cash at end of November minus net one-off CM costs of circa $25m. Debt of $35m (first $2.5m or so payment due this month). Probably at circa $15m-$20m cash at end of December. Loan covenants may require more than that, especially given they are running on a net cash outflow basis now.
Downgraded Renison cash flow probably circa $13m-$15m p.a. (maybe lower if those closure costs start to hit).
Versus Nifty CM costs of $16.8m per annum (if you're lucky) plus annual loan repayments (first quarterly payment is due December) of approximately $10m, plus ongoing rehab and corporate costs of circa $2-3m if you're lucky. So in total probably net $2.5-$3.5m cash outflow per quarter once things stabilise.
This is going lower. They are bleeding money before even taking into account the loan repayments and have zero flexibility re: any sale process for Nifty. Confirmed cap raising imminent - players will push the price lower to get a derisked entry to the raise.
Citi loan is not secured against Renison.
Not sure who would buy Nifty.
Best course of action for MLX, given complete lack of trust in mgt, is (in my opinion) - sell their 50% in Renison (likely distressed sale price circa $150-200m), retire debt ($35m), go through a proper sale process for Nifty, return capital to shareholders (circa $100-150m), keep $10-20m cash on hand for whatever comes next. Current market cap $60m so a $100-150m return of capital would be a good outcome. Loads of volatility in the short term though as banks, activist shareholders, JV partners all circling with different agendas.
Disclosure: sold out today for a loss after buying just before Nifty CM announcement.
MLX Price at posting:
6.6¢ Sentiment: Sell Disclosure: Not Held
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