Babcock Refinancing Reprieve For Mtm
Sydney Morning Herald
Friday June 29, 2001
MTM Entertainment Trust has been given a stay of execution after Babcock & Brown agreed to a refinancing package.
Included in the rescue deal is a rights issue at 26.5c a unit to raise $7 million, fully underwritten by Babcock & Brown.
The 11th-hour arrangement was made to prevent the trust, which owns the four Imax cinemas across the country and the retail portion of the Finger Wharf at Woolloomooloo, from going into receivership.
Babcock & Brown, a global finance house, made an offer last month to the trust at 34.5c a unit. The group holds 24 per cent of MTM Entertainment and said the offer was now unconditional and had been extended until August 8.
The trust was forced to seek refinancing because it had a $37.5 million debt package with Macquarie Bank which was to expire on June 30. Macquarie Bank declined to offer more money but extended the existing facility until December 31.
The extension was conditional, however, on Babcock & Brown's agreeing to an interim liquidity package.
The trust's cash position as at March 31 was $3.7 million, which has been all but swallowed up by legal and advisory fees.
As part of the package, Babcock & Brown intends to lend the trust up to $2 million to meet interest payments under its loan facility with Macquarie.
Mr Robert Topfer, a director of Babcock & Brown, said it was important to emphasise that it was in the best interest of unitholders to accept its takeover offer.
In another development, the trust and Babcock & Brown have disputed the entitlement of Hoyts to terminate its $425,000-a-year lease obligation at the South Bank convention and cinema complex in Brisbane.
© 2001 Sydney Morning Herald
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