MIE’s Liquidity Weak as Bond Maturity Looms, Says Lucror

“We believe MIE’s liquidity remains very weak due to insufficient cash flow generation and cash balances to meet the $182 million bond maturing next month,” said Leonard Law, credit analyst at Lucror Analytics.

MIE Holdings’ cash and cash equivalents were 1.16 billion yuan ($178.2 million) and total borrowings were 5.5 billion yuan as at June 30, according to its results for the six months ended June 30.

MIE has $182 million of bonds maturing Feb. 6, according to Bloomberg-compiled data.

“Prospects of a successful refinancing via bank facilities appear dim, given the company’s high leverage and high levels of secured bank debt”.

“Our base case remains potential restructuring for both 2018s and 2019s with potential haircut,” Deutsche Bank said in a report last month.

“Our view is based on estimated cash flows from China operations, increased interest cost obligations, secured borrowing senior to bonds in the cap structure and lack of further unsecured asset available to the company”: Deutsche Bank report.

NOTE: MIE said in July that it was ending its bond buyback after receiving tepid responses from investors.

January 4, 2018, 03:49:46 GMT
By Denise Wee; Edited by Andrew Monahan