Emeco Holdings Acquisition, page-16

Hi I feel like just a down sayer when their price continues to bubble along. My continued interest is just enthused to understand how the market is acting here and what is driving it. So in 2012/13 (from this last annual report) they: - had $1 billion of equipment (compared to $349m of equipment today plus force equipment ($51) - with this $1 billion of equipment back then they did $61m EBIT and covered an interest bill of $25m and made a profit (real not "operating runrate" Also remember in 2013 things were booming in mining... rates where at record highs and with full utilisation. So getting maximum revenue and earnings from the $1b of equipment. Now .. They have $457m of debt at 9.25% and interest bill of $43m. With roughly the same value in equipment. So minimal NTA if at all. (Actually have negative equity) So how do you get the earnings (ebit even) to cover the interest bill with less then half the equipment. They do by using EBITDA to pay the interest bill and kick replacement capital and maintenance capital down the road. Or the fleet gets older and less maintained. Shares on issue now are 2.2 billion shares plus the new ones for force. So effectively four times as many shares. In other words 25 cents today is like a historical $1.00 if just looking as SP face value. But as I said it seems I can see all this but for some reason institutions are pouring in. So while they do you may as well ride it as well. Just watch if they start running for exit, get off quick.