Ann: MV Ocean Outback Update, page-12

It is on Company Announcement released on 10 Dec, one day before it listed. I did not look at it previously, thought it might be no difference to the prospectus. But I had a look yesterday, and it really 'frighten' me. More than $477m debt need to be repaid within 1 year, compared with current asset of $120m. Seriously, the company would had called for administrator if it was not public listed. I was not able understand why the share price drop since listed with the IPO shares were oversubscribed before, but I think now I understand the reason.

More than $184m convertible notes were converted into ordinary shares upon listed. Capital raised $289m, among them, $133 to pay off the debt. So the company have $117m debt at the moment. But still they are in USD.

See the sensitivity analysis, on page 113 of the prospectus, the 2016 pro forma EBIT was prepared based on FX rate AUD/USD 0.75, if the FX rate go to 0.70, there will be favourable movement of 2.7m in sales. BUT look at the small print in the notes, the interest payment and the debt value will also increase, which give raise to the FX loss of $11.8m, book the net loss into adjusted 2016 pro forma EBIT.

In the event of the delay of delivery of the new vessel, there would be loss of $3.4m for 30 days, which is about $1.1m per day. Check how many days the Outback vessel, which is currently in trouble, would cause delay, multiple by $1.1m plus the cost of repair, get the further adjusted EBIT. Then you would know how much the share should worth now.