It will be an interesting half year result. I am not sure about a capital raising being necessary or possible. I don't think the two big shareholders would support it. It would be the end of Chenoweth.
The business has historically generated great cashflow and without value destroying digital acquisitions coming up, they should be able to pay down debt reasonably quickly.
If they have to pay the full $30m earn-outs at the end of FY13 on the brandsexclusive acquisition this will use some cash, but presumably EBITDA will be commensurately higher to support the debt load.
A sale of the NZ print assets would be the best outcome to address the debt, but management have backed away from that in recent interviews, so I am guessing they couldn't find buyers.
HT1 Price at posting:
26.2¢ Sentiment: LT Buy Disclosure: Held
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