Don’t forget the $4m per annum debt repayment obligations. Priority for the business is to repair its balance sheet first, which in itself if successful should theoretically re-rate the company as the overall cost of equity should decline. Once the balance sheet reaches an optimal state, i.e. minimal or no debt, and without a financier taking first dibs at the cash flow available for debt servicing/reduction, the logical next step is to use that cash to increase the value of the company. The risk now remains whether they can make $4m p.a. of cash over the next few years, which based on current projections seems reasonable. If they can’t meet the debt obligations, then there’s a good chance the financier will ask them to raise equity at current prices.Â