Seems relatively positive. EPN chip in $9.5mil at a buyin of...

Seems relatively positive. EPN chip in $9.5mil at a buyin of 6.7c which is above last traded price.

A further $200mil raised through underwriten rights issue. EPN to fully participate and underwiter any shortall. They will come out on the otherside with minimum 15% ownership, but after underwriting I suspect a lot more.

Macquarie are cutting the umbilical cord. Selling their shares in MDT nd the management rights. Good thing?

Money to go towards paying off the unsecured debt, ie cancer. Their will be excess money which can lower overall secured debt and gearing.

It will be much easier to refinance/extend the secured debt on favourable terms now and cashflow will finally be able to work torwards lowering debts at an accelerated rate.

The negative is obvious. Current market cap of about $60mil. Total funds raised $209.5mil. If you dont participate in the rights issue you will be heavily diluted.

If you do participate your equity is still diluted substantially.

Previous NTA of 32c(incl def tax liability). Number shares on issue 943mil.

New shares will be about 4.070bil.

New NTA about [(0.32*943)+209.5mil]/4.070bil
New NTA=12.6c

Will the new shares trade closer to NTA?

The upside is asset values will be upgraded in the future, but with so many shares on issue it will take alot to move the NTA significantly.

Perhaps it will be better to value MDT on an EPS basis.

Previously the EPS was 1.54c at a reasonable EPS ratio of 8:1 you have a sp of about 12c.

The new diluted EPS is substantially less and will result in a lower sp.

It could have been ALOT worse ala BBI/PIH, they could have raised funds at huge discount and kill existing holders. They didnt.

But I dont see much room for upward movement in sp. But sould be able to maintain current levels or move up to 8c range.

Goodluck when MDT resumes tradiing.