From 1st half announcement re financials note 12 - secured bank...

From 1st half announcement re financials note 12 - secured bank debt is $259 million.

Before you read on suggest you read Section 181 of the Corps Act (directors responsibility is to the corporation).

A possible scenario is that a fund approach the secured lenders and negotiate to buy the secured debt over the company. At a significant discount (think Slater Gordon), paying 20 cents on the dollar (i.e. $51.8 million). Then the fund (realising that the company has very little possibility of meeting its debt maturity obligations) approaches the company with a deal that looks like this:

- offer to cancel say $150 million (face value) of the debt they hold in return for the issue of shares in the company at an agreed issue price of $0.25 per share.

Net result: company has reduced outstanding debt from $259 million to $109 million and has issued 600 million shares (outstanding now is approximately 183 million shares).

Total shares on issue: 783 million of which fund has 600 million and the company has a reduced debt profile.

Share price after issue would likely be less than $0.25