• Given that over $1b AUD of debt is maturing in 2010 I would have thought that the cash on hand c.$329m would be better utilised as safeguard if refinancing cannot be achieved. Comments?
The board determined that utilising a small portion of the available cash balance for the buy back program provides the most appropriate balance between delivering immediate security holder value and retaining maximum flexibility in advance of the financing requirements in 2010. The A$50m being reserved for the buy back approximates the cash retained as a consequence of the revised distribution policy.
Also- I please provide any details of current debt financing initiatives where possible.
As the first maturity is over a year away, there is nothing material to report at this stage.
• I plan to hold my holding post-buy back tender. Does MMG forsee returning to normal dividend (20-40c per annum) plan in the medium term?
The distribution policy was revised in December such that the directors will determine future distributions based on the needs of the business at the time. There has been no further revision to that policy.
• Is MMG actively considering selling its stake in ACM as this seems more a liability than an asset in the current climate within the USA advertising space?
Whilst ACM is being impacted by the difficult economic conditions in the US, this is a cyclical issue and the long term prospects for the business in a more normal economic environment remain sound. That said, MMG is alive to all options to generate security holder value.
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Given the above responses, it would seem that management as confident (blissfully?) that refi is no problem at all.
Comments?
MMG Price at posting:
79.0¢ Sentiment: Hold Disclosure: Not Held
