FMG is a terrific stock, and very healthy balance sheet.What I...

FMG is a terrific stock, and very healthy balance sheet.
What I would like to see FMG do going forward is to unwind that debt they are holding. With all the free cash hold they are generating, pull back some of the dividend payout, and use free cash to run your business. What is left over can be used for the dividend in the future.

The company is currently running at 4.5bn debt.
750mil coming to maturity at 2024. This should be wiped out completely at maturity.
200mil coming to maturity at 2025. This should be wiped out completely at maturity.
600mil coming to maturity at 2027/28. This too should be wiped out.

That would leave the company with a remaining 1.5bil at 2031. That can be left to run its course.

I just don't see a need for a company like FMG to carry any debt with the type of cash flow they are generating.
I understand this will not always be the case going forward, which makes it all the more important to clear the debt slate when you can.
One of the problems with using free cash flow like this, would mean the dividend payout ratio must be reduced. I personally am fine for that to occur, but I feel corporate Australia is caught in the trap of believe they need to keep a high payout ratio to satisfy investors.

Be interesting to hear what others my think on this matter, and whether I have my facts about the debt incorrect in my head.