Ann: Trading Update, page-52

The Broome supply base is held in JV with Toll, but it's small beer in the overall value of MRM - MRM's 50% JV share is generating ~$2m NPAT p.a., so even if MRM could monetize that (i guess Toll's new Japanese owner is probably the only logical buyer here), it might be worth $20m or so to MRM shareholders (using a crude 10x multiple).

Given the laughably poor capital allocation track record of MRM's management - especially their decision to do a huge, debt-funded acquisition that brought with it $150m of future capex commitments (when oversupply was already clearly becoming an issue) at the very peak of the cycle - i would regard a change in management and board as both a positive and necessary development in this business.

This is a fascinating deep-value situation, but all too hard and uncertain for me, so like you i choose to watch from the sidelines until there's more clarity on the following (all of which should come to a head in the next 6-12 months):

- How they resolve their liquidity squeeze (i.e. asset sale vs. equity raise, and at what terms)
- What the stay-in-business capex profile of MRM really is (how much capex do they need to spend annually to keep their existing fleet operational)
- Whether the management and board team which committed the colossal capital allocation blunder takes any responsibility (i.e. do they lose their jobs - they certainly should)