Might as well just sell all the assets off Easier said than done. MDT are open to selling assets and have done so, but not many fair offers are forthcoming.
I mean net tangible assets is 32c, and get our money back. In an orderly sale 32c might be possible. But MDT have debt due, infact some overdue, and more due to mature shortly. The banks control the companies fate. Nobody will pay book value under those circumstances. Liquidation would result on 0c for shareholders.
Why is it we have all this trouble over a measly 100m, can't we just go to another bank? The $100mil is unsecured. The asset level debt is so heavily geared that its impossible to add the unsecured debt into an existing secured facility. You and I can often roll our credit card debt into our mortgages if equity allows. MDT dont have the equity margin required.
Without security no bank is interested. Theyve tried already.
Or just sell the whole trust for say 20c its better than a cap raising Too much trouble. Shareholder vote. Some refuse to sell. And why would an acquirer pay mor than current market price?
Best outcome could be a rival recap proposal that offers better value to existing holders.
The other alternative would be to raise less. $100mil might be enough to see off the immediate threat. The June debt is secured and should be rolled over.
Then either sell an asset in an orderly fashion or raise fresh capital at a higher price.
I guess they want the complete solution now. They dont want to raise funds again or forced into asset sales. Do this now, then concentrate on the business and rebuilding sh wealth without looking over their shoulders.
MDT Price at posting:
6.4¢ Sentiment: Sell Disclosure: Not Held
