May raise capital, page-20

Thanks for that. I have only been a holder for a year, so thanks for the history lesson. While I am happy for IFL to take on some debt, I would be apprehensive if they purchased StatePlus using all debt. Your analysis shows that it would be OK for IFL, but a stretch. When a company has a stretched bal sheet, IMO, they are exposed to small movements in revenue and profit. If for instance, they lost a contract for FUM, with high debt, that could hurt much more than with low debt. Also, pricing power moves to the purchaser, so there could be margin squeeze as IFL try to maintain revenue and contracts to support the debt rather than get nothing (you know the saying "10% of something is better than 100% of nothing")
Balancing the debt/equity mix and getting it right to protect the business from shocks (think STO) is a board decision that should be treated with the utmost care. Getting it wrong can be devastating for the business.
(It should be noted that I am conservative by nature and do not invest in companies with a high net debt to equity ratio)

HT1