I'd like to start a new thread here. Apart from the debt roll issues that the whole world faces, what I believe we should look at with GMG is their interest cover. They have extensive investments in their funds, these funds are highly leveraged. If the banks that lend to these particular funds say - 'we do not want any distributions coming out of these funds, we want all real estate cash flows to pay down debt to get LVR's down' - then the funds cannot make distributions (called a cash sweep by the banks). This means that GMG do not get a distribution. If they do not get a distribution from the investments in their funds, it has a significant impact on their interest coverage ratio back at the corporate level. So Mr Goodman needs to make some tough decisions.
GMG Price at posting:
16.8¢ Sentiment: None Disclosure: Not Held
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