There are at least three coherent answers to any complex question. You name one of these.
Fresh equity would reduce debt. But it would do little more than earn the interest cost it saved. Yes, it would improve the balance sheet and help our witless banks 'see', but capital is way more expensive than debt.
In the last half, IFN paid its interest AND repaid ~$40m in principal (I put aside the Bodangora project debt to illustrate). Demonstrably, the business can support the current level of debt.
IFN's problem was always the restrictive Global Finance Facility that sweeps almost all cash to principal repayments. It could never flourish with this burden. The refi removes this problem and allows IFN to grow its generating assets. Normalising the interest cost can come later.
Thank you for helping me think this through.
Ash
IFN Price at posting:
64.3¢ Sentiment: Buy Disclosure: Held
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