March & April the board was saying they will deliver $11m to $16M in EBITDA. May that turned to $5m. Note Half year was $4.2m That's massive turnaround when they would have had Jan to March actuals. The business will be smaller and yes debt will be lower by maybe $54m but they will be burdened by potentially an infrastructure (Backoffice) for a larger business. Don't forget the EBITDA they are talking to is before abnormals!
The CFO hasn't been there long and she has resigned (maybe pushed!)
This business should be making over $30m in EBITDA yet it is struggling to breakeven.
The divestiture will come with some issues as all carve outs do, how this will play out who knows. Also the deal is not done until its done so lets wait for the finalisation on the 30th June.
I suspect that without the deal the business would struggle to hit is bank covenants.
Don't discount a potential Capital raising as they will still be carrying over $30m in debt and basically not making any money!
What did I miss?, page-2
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