Thanks for that. I hadn't spotted that note to the accounts. So the reserves have gone from £23.9 million in 2007 to £7.7 million at the end of 2008. Wonder what the position is now? Presumably they can't continue to keep paying big dividends if there are limited reserves?
yeah correct, you can't pay divdends out of share premium account it's illegal.
So distributable reserves of £7.7m c/f from 2008 y/e plus retained profit for 2009 (whatever that was) would be max dividend possible for 2009.
which means shareholders likely have BIG problem, because now operating company doesn't generate enough CASH to service the interest (via the dividends) on the borrowing.
Cash flow statement would be telling....
even rough calculation on borrowing of £200m at best at 5% - £10m per annum interest costs....
means either
a) shareholders provide additonal funding to MIOM to pay interest
b) they default on interest payments, meaning bank could call in loans...
looking forward, how the hell the £200m capital will be repaid is anyones guess...
some red faced bankers in portugal facing big write offs....
Anyone care to put a value on IOMSPC at moment???
seems we both just said the same thing at the same time in a different form