Youwererobbed
Not sure your analysis is correct! Banks can no more influence the share price than we can, look at some of the banks own share prices over the last year or so. It is a question of confidence in the market and at the moment there is not very much of that around. MYT’s share price should be around 80p but for obvious reasons this is not the case at the moment!
The debt mountain is not really that big in real terms, £450 – 500 million, TUI has a 500m bond not to mention another 4-6 billion of outstanding debt, given your reasoning the CAA should pull their bond in the UK now as they are valued at 2.5 billion on the German stock exchange. MYT's Off book debt leases etc are relatively short term and covered by day too day operations. If the refinancing goes ahead the share price will rise to around 60 – 80p, I hope! In the short term I expect to see the share price drop again next week as some investors make a few quick bucks. Then again if I were that good at predicting share prices I would not have lost so much money last year!
The CAA bond is not really an issue, if we don’t get the financing in place it is game over at the end of the summer. If the financing is put in place and with the current figures I can see no reason for it not to be, then the share price will rise and our debt is reduced (convertible bonds) and many of our problems start to go away! Banks are in the business of lending money and as long as you can keep paying the interest and have cash flow they will be only too happy to lend it to you. They stand to make 12 million in interest charges this year from MYT!
The hedging situation the Mail made such a big deal over is a bit of a non-story as those who hedged at the beginning of the year may catch a cold. When the financing issue is dealt with then I have no doubt MYT will hedge against next year. Delaying this process may prove to have been a good move, granted a case of serendipity.
The company is proving it is a sound business and can continue to operate even with all the bad press. The future looks much better than it did a few months ago but I am bracing for another round of bad publicity from the press, they hate good news these days so they like you are bound to look on the black side and play down the good news!
Put in perspective look at the debt some of our competitors have and no one is suggesting they are about to go bust! MYT’s biggest problem has been the management that were running the company until last year and the connection to the ENRON scandal, which drove down our share price. The debt can be managed if the banks feel the company is basically sound, which it appears to be. I am confident the worst is behind us as long as the refinancing goes ahead.
The bottom line is that a good portion of our debt is due to the low share price; if the share price rises then a good part of the debt ceases to be an issue. The share price will rise if the financing is put in place and the company continues to perform and make money. Even under the old management they managed to turn a good profit every year except last year. Had the old board run the company as it is being run now then our share price would still be around £5 and I would be a lot better off than I am now!
Last edited by kinsman; 3rd May 2003 at 20:19.