It's almost like they only do a bank reconciliation at the end...

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Whatismyusername

171 Posts.

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23/10/19

13:43

Post #: 41030530
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Originally posted by Cashmeoutside: ↑

I don’t think there’s any doubts the net debt: ebitda ratio was well > 1.5 for Sept Qtr. Net Debt was $191m at the end of the quarter (excl director loan), so they would need to have made $31m EBITDA for the quarter not to be in breach. They made $17m REVENUE - fail.

if you look at when this company has done a CR this year:
Q1 (Jan/Feb) 1 week after quarterly
Q2 (July) 1 week after quarterly
Q3 (Sept) With quarterly

Other than obviously needing cash my suspicion is that the debt holders allow a breach of the covenants so long as additional equity is raised. I see no difference in the Sept Qtr, even though they could have potentially snuck through with the director loan and cash from the shipments made early October.

No one wanted to underwrite the rights issue - that’s a bit concerning. With the SP now under the rights issue price I suspect a large shortfall is upon us. Will the debt holders allow the breach if only a couple of mill is raised on the 15th of November? I suspect not and AJM will either need to drop the raise price closer to cannacords 4c target or the administrators are called in.. only my thoughts

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It's almost like they only do a bank reconciliation at the end of quarter and then decide they need to pass the hat around....

When does the company realise they need to re-price the non-renounceable, non-underwritten, over-priced rights issue... 6c is looking increasingly poor as an entry price for fresh equity in my view....

Best of luck.

AJM Price at posting: 5.7¢ Sentiment: Sell Disclosure: Not Held
2 Upvote

0 Great analysis

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