Its Financial Position as reported in the FY16 report show that it's net current position is some $7M (from memory) under. That is, the expected cash/earnings within the next 12 months is only $7M under the expected liabilities to be paid (this includes the $75M).
But as we briefly discussed in that other post, closer examination of the current liabilities show that a few millions in provision for liabilities might not need to be paid at all - warrantees, deposits etc.
So if we were to be generous, MRM's position as at end of FY16 is only some $1.6M below.
Now if we include the cash flow from the recent win that's starting; possibly another win starting January... these should bring in more cash and MRM could comfortably pay its dues to June2017 without needing any additional cap raising.
I don't know how management estimate EBITDA, but it's possible that those estimates does not include the recent job win; probably not include any cash from fleet sales.
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There's also two interpretation to the recent repayment extension. One is that the bankers do not want to push MRM into administration, possible but unlikely since MRM's balance sheet show it could repay the first instalment without too much difficulties (note cash at bank was something like $40M, add to that the collectibles and new cash inflow from a few odd jobs).
The other alternative is that the banks see something positive and wouldn't mind delaying the repayment if the terms are a bit more generous, make a few extra bucks in fees etc.
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But yea, if we have a big capital base things would be a bit easier when facing a situation like MRM, and a lot of other opportunities where the rewards are great but the short term price/market volatilities can be jittery.
But then all opportunities of great value come with that kind of risks I think. So take a look at Sirtex... a wonderful business with zero debt selling at a very reasonable price.
It's a bargain at the current $14.25 but there is still a risk of it going further south if next year's research didn't pan out.
