Is there still a chance of an adverse court ruling / liability from the claim against MND by WICET? Last I checked this was somewhere around $90-$130m.
It is $130m. But remember that this claim is not against MND; rather against Monadelphous Muhibbah Marine (MMM), which is a JV arrangements into which MND has entered on a 50% interest basis. So, MND's exposure is $65m, I believe.
(To get really technical, in terms of the Corporations Act, MND enters into Deed of Cross Guarantee arrangement with all its controlled entities, and MMM is not listed as one of these. Besides the Cross Guarantee Deed covers delinquencies only in the event of wind-up.)
Incidentally, MMM has counterclaimed $90m against WICET (which is possibly where your $90m reference arises).
There is no legal reason MND can't pay a special dividend if the WICET claim remains pending.
Also note re excess cash balance: good mining services / construction companies generally carry a bit of excess cash on their balance sheets as a buffer against contract mispricing risk (which in itself is a kind of "off balance sheet risk" that is very hard to identify). To their credit, MND have a very good record so far in not over-running contracts.
Yes, but my point is that MND is now carrying a greater "buffer" than ever before (so if you are saying this is at an appropriate level today, then it implies that the company was under-provided in terms of contract mis-pricing buffer in the past. And I don't believe that can be the case. At least, I certainly hope not!)
MND Price at posting:
$7.19 Sentiment: Buy Disclosure: Held
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