Question-and-Answer Session
Unidentified Participant
(inaudible).
Peter Stokes
Fair enough. I'll just repeat the question for the web cast. Two parts, one was the steps to, needed to be able to resume the distribution, and then what would I do with the, what do we do with the cash flow at that stage in terms of alternatives? The two main elements of the reduction of debt at our biggest business, we have to get to a six times leverage. And we are – yes, it is six at the moment, so there is a clear path. Continued generation of cash flow in that business, we will pay down the debt through the swap. And so depending on the level of operations, we will see that reduction and then we'll be able to resume distributions for that business. Given the holding company structure, that then can be distributed to the holding companies, that’s a lot of – that is a big business to have locked up effectively in the short-term, and so we will work through that.
The other element is just to have the fundamental confidence about the business, the ability to refinance where the capital markets are at. We feel comfortable with the leverage at the moment, the markets are volatile, it is an ongoing watching brief. So those are really the two key elements, is good consistent cash flows being generated elsewhere. So if it comes together, we also will be deleveraging, we will be making sure we can deal with the holding company debt, which is only about 65 million or so. So there’s two elements of the delever.
Beyond that, when you look at the amount of cash flow, we would certainly look to resume the distribution, if that is the history of the company, and that we were at quite attractive levels of distributions before, the businesses remaining in good place. There is always competition for capital, but there is also a commitment to resuming distributions for our investors during the register in the first place. But what we have typically found in terms of acquisition and provide capital is that we’ve sought external fund through for our capital debt facilities, taken new equity, but there are opportunities in these markets projecting forward but looking hypothetically raising capital depends on the share price where we are setting ourselves up not to have to raise capital now, and I don't think that is a very important statement.
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