I think their current GEAR facility is a safety blanket for working capital.
It is really hard to say what is optimal debt. If there was no big developments or potential acquisitions, I'd prefer modest debt which is what they have now.
But there are big developments such as ED and L. They should be able to find a way of making the numbers work, with their infrastructure or their neighbour's. Would I be okay if they hold back dividends a bit, so they can retain earnings and use a bit of debt for they big developments? I'd much prefer that to an equity raise. And there could be acquisitions if the price is acceptable. In these cases, the optimal debt - this might sound crazy - but it may be a *Dr Evil style* bazilion dollars.
SMR Price at posting:
$3.82 Sentiment: None Disclosure: Held
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