the companies with no debt and multiple sources of income will be the first to shutdown production. As they have no bank debts to service. The more indebted ones will ramp up production, and that will create the oversupply to flush out the higher cost supplies.
om holdings debt repayment schedule is over 5 years. If u look into their repayment schedule. About aud 130mil is from 5 years out. I dont think there will be any repayment problems. Particularly with an additional 250k of low cost manganese coming from the tailing plant and the sinter plant coming up end of this month.
even without these 2 items. 1st half 2019 already had 107mil aud in operating profits. Annualized that is aud 214mil. This is without the tailings plant and sinter plant.
I dont think maintaining aud 200mil annually over the next 3 years is a problem. Which is more than sufficient to repay the loans.
OMH Price at posting:
51.5¢ Sentiment: Buy Disclosure: Held
