As a brief contribution to this topic:* The company has been...

As a brief contribution to this topic:

* The company has been clear that they will re-invest in their businesses at a rate equivalent to depreciation. As such I wouldn't be valuing this on an EBITDA multiple unless a decent part of this re-investment is not "stay in business" but facilitates growth. I don't know the answer to that however believe most is stay in business hence not what I'd consider free cash flow. My approach to this could simply be my risk aversion / profiling. I notice the EnviroWaste NZ transaction you mention. When TPI paid up for Cleanaway (EBITDA 11.36) it was sold to shareholders on the basis that it was really 7.5 or 6.8 times ones efficiencies taken into account. So yes, 7.5 might be "ok" in a strong market but again comes down to how much of depreciation is stay in business.

* Related to the above, I prefer EBIT / interest as an indication of how readily their debt is serviced. That drops the ratios somewhat.

* I haven't see Cam's spreadsheet. Are the SPS taking into account? They are classified as equity, and their distributions are not interest but a distribution of company equity. I'm presuming this has been considered. As a positive, the company actually pays these distributions whereas the real credit impaired companies (ELD, PPX ... ) don't on their various hybrids / whatever.

* The tough interest numbers you quote, Cam, I believe are from the P&L. A moderate portion is not actually cash (past "capitalised" stuff). I guess shows their aggressive past accounting. Anyway, the statement of cash flows is clearer. But yes, as they massage down debt there should be an uplift in overall position. And a lot of their legacy issues are hopefully just that.

* Although modelling on scenario 4 is fine, that would impact the entire market so companies in healthier position would also get the uplift in earnings and likely ratios (even if from a higher base).

Overall, I can see the logic of an investment in this stock, however I also think there are others that provide reasonable return with less risk (albeit that sentence is much less true now after the market's run than it was 3 or 6 months ago).

MJS