Chart has short term potential, page-425

AHS

one thing that most are missing:

without asset sales, the company only makes enough to pay interest......

the prev announc re bank debt suggested that monies from asset sales would go towards paying down debt.

today's announc - suggests that there is a scheduale, and that the 76m odd is not sufficient to meet the bankers requirements.

it is unusual for debt covenants to be fully disclosed......however, when there has been a material breach.....then it is normal for more details to be released. MRM has done neither (this is what I mean by not meaning my personal risk criteria).

as you would be aware - the jaya sub is funded by an interco loan. ....the boats/shipyards generate the rev's required to pay the int. the company sold 3 sub's in the last half - again not disclosed.

while there is likely to be a writedown in carrying value - that is less important to me - rather what does the asset base generate, does it cover liabilities, and is there "comfort" in the assets. what is obvious is that there is intense competition in OSV and most marine services. in simple terms - the returns inside this business have been falling since before the mistimed acquisition !!!!!!!!!!!!!!!!!!!!!!!!!!!!!! the guff that it has $2/share in assets is immaterial - if they don't generate sufficient $$$ to pay down debt .

I would look at this stock once the bal sheet risks have been addressed. Viz: STO / ORG . any cap raise will be done at similar discounts to TERP (say 20-25%). so new "punters" will get the reward at the expense of exsisting.

anyways enough rambling, I think it "should" survive......it will be a painful and bumpy ride. as AHS has pointed out - a few other players have gone to the wall. I am yet to see any hard data on the "amount" of overcapacity within the industry (ie how long will margins remain depressed). this is critical to the (eventual) rebound.....and is material to future share price performance.

rgds
V_H