trading halt, page-16

Reasons for decline in MAH's cash position.

The company announced that its net debt to equity position had increase from 12% in December 2008 to 40% in mid April which implies that its cash balance fell from $74m to $5m during the 3 months.

The cash burn is as followed

• Increased in working capital as a result of delayed payment from some customers. These payments are expected to be received within the next 6 months and will increase the cash balance of MAH.

• Increased in working capital as a result of initial ramp up stage of new contracts. Some contracts just started require a higher amount of cash in the initial stages and MAH is not expected to receive revenue for this for the next 3 – 9 months. The rate of capital required for these projects is expected to decrease over this period.

• Delayed payment of 2 contracts. MAH is currently in discussion about the scope of work with 2 contracts that has approximately $15m - $20m in revenue. MAH is expected to receive this in the next 1 – 6 months. This payment alone will see net debt to equity fall back to 33%

• Higher one off costs from removal of equipment ($10m). MAH had higher one off costs from the removal of its equipment from contracts that have been canceled or suspended.

If MAH is able to raise $60m at $0.32 this will be a good outcome for MAH as it will provide it with the working capital to complete jobs in hand.

Also I think that many companies are raising debt now before KRudd's $60 billion in govt bonds in the next 12 months.

I think that insto money will be hard to come by in the next 12 months, hence there is capital raisings by companies every day for the past 2 weeks. I expect this to continue

Management has stated that they intend to reduce gearing down from its current level and expect FY09 (June end) to be 30% - 35%. Over the longer term management aims to have gearing in the 25% - 30% range.