Ann: Change in substantial holding - Clayton Howes, page-40

- Placement will cut it by 1/3 and cut the IR from 18.3% to 13.3-16.3%. Better, but still high.

- Cashflow can possibly lower it some more, which boosts the ratios too.

- They'd always be attempting to re-finance. If hasn't happened yet, so it's apparently difficult. It should be easier after the placement, but it'd only be worth it if the terms are superior to the current 'performance' terms on offer, the 13.3-16.3%.

2 main reasons lenders not wanting to lend to us:

1. Bad ratios, near to 0.99 etc, as of pre-placement.
2. Bad lending market conditions and high economic uncertainty.

The placement might improve the ratios enough that we could refinance, but I don't know whether we would achieve better IR terms than already on offer.

At least the placement will give us more time to consider the options, and search out re-financing options. The lender seemed to say that they'll be happy after the corporate debt is cut to $50m, but market conditions have changed since then, though we might be getting it to sub-$50m.

The current path of: higher secured receivables, higher average credit ratings, improving financial ratios, lower leverage should mean the options available to us are improving over time (if no surprise losses).


MME has a lower overall debt funding cost (for the $1b debt facilities), but the corporate debt is the expensive one. Which is falling from $75m to <$50m outstanding, I think, and with a falling IR, but still high.



What is Z1P's funding cost? How does it compare to our $1b funding cost?
What is their corporate debt cost? How does it compare to ours? Ours is incurring something like a penalty rate though, because it was becoming overdue.