Someone posted earlier in regards to notes about mitigating actions RFG could take in the event covenants were breached. I couldn't find the post quickly scrolling through so have reposted the excerpt from the directors report.
Obviously options 1 and 2 would be at the discretion of the banks.
Option 3 seems unlikely as which bank is going to lend you money whilst your current lender is calling in the debt although maybe some vulture hedge funds will swoop and use the debt to take control of the company with some sort of debt to equity swap screwing over the equity holders.
Option 4 would potentially get the support of the banks if they had a buyer lined up however they may be hesitant if they are just starting the sales process, plus being a distressed seller is one way to guarantee you are not going to get the best price for an asset leaving equity holder worse off.
Option 5 would be the most likely option and would almost certainly have the support of the banks. A rights issue to existing holders would be the fairest solution to holders, it would only require them to stump up some money to maintain their holdings and not be diluted. Given the results I am surprised that they didn't just pull the trigger on this in the last month to shore up the balance sheet.
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