Big payout coming to MAH?, page-7

Actually, as I've pointed out before the CC contract is massively overrated on the fortunes of MAH.

For a start FMG has already beaten MAH up and knocked out a lot of the profit.

Secondly, it has minimal PPE tied up in the project. As MAH's debt covenants will almost certainly be based on EBITDA and not EBIT, the loss of this contract won't have such an impact. Obviously the company will have to restructure HO pretty quick to get costs down further though.

The contracts that are important are the equipment based ones (Tropicana) where the company has already sunk money into PPE which should come back to the company as free cash flow over the life of the contract.

Finally, the FMG contract acts as a poison pill as it has a change of control clause in it (if MAH gets taken over FMG can walk without penalties is my understanding). If they lose this then they become a sitting duck for LEI or DOW to make a bid for them for their remaining contracts.

I'm not sure I'd go so far as to say I want them to lose the FMG contract, but I wouldn't be particularly concerned if they do. If they were to lose Tropicana without compensation then I'd be far more concerned.