McAleese eyes Friday for survival deal


Firm reiterates SC Lowy negotiations have no guarantee of success as Atlas gains its own arrangement

McAleese eyes Friday for survival deal
McAleese might have light at tunnel's end.

 

McAleese’s future should be clearer in three days’ time as it works with its ‘white knight’ SC Lowy on a binding heads of agreement on refinancing.

A month after its last stock exchange announcement, the mining-exposed diversified transport and logistics firm signals any agreement will mean a dilution of the value of existing shareholding’s including that of chairman and senior investor Mark Rowsthorn.

The news comes just after one of its main customers, Atlas Iron, gained a similar deal with its creditors.

"The transaction under negotiation is expected to involve the current financiers selling their debt to SC Lowy and a reduction by SC Lowy of that debt by way of compromise, with the compromised debt to be on new terms agreed with the Company," McAleese says.

"The transaction is expected to include an equity placement to SC Lowy in partial consideration for providing the compromised debt and an equity rights issue underwritten by entities associated with Mark Rowsthorn, the proceeds of which would be used to repay some of the compromised debt.

"The pricing of the placement and rights issue are expected to be materially dilutive to existing equity, however, the overall transaction is intended to create a sustainable capital structure for the Company."

If all goes to plan, the company’s share will resume trading on Monday.

Last Friday, Atlas, with which McAleese has an ore sales deal in lieu of an earlier transport contract, said it had lodged a creditors’ scheme of arrangement, approved by the Federal Court of Australia, with the Australian Securities and Investments Commission (ASIC), to be implemented this Friday.

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