SCRAP metal recycler CMA Corporation has renegotiated and increased its debts with two of its banks to about $166 million, but has Commonwealth Bank demanding ''early repayment'' on a $7.4 million debt.
CBA's ''fly in the ointment'' stance was revealed late yesterday in CMA's long-awaited December half results, which showed a loss of just under $7 million for the latest six months - a vast improvement on the $73 million lost for the whole of 2008-09. The figure was in line with CMA's predictions.
The recycler denies CBA has any right to want its money back immediately, and offered not to draw down any more of the total $11 million line of credit for equipment financing, if the bank holds off.
CMA's board had the company's shares suspended from trading on February 19 while they renegotiated their debts and took advice from Macquarie Capital.
The release of its results last night, two hours after the sharemarket closed, did not mention whether the company expected its shares to resume trading today. A statement to the market last Friday suggested it would keep its shares suspended while ''it is engaged in discussions on its capital structure''.
Managing director Doug Rowe said he looked forward ''to updating shareholders in the coming months on the outcome of our review of our equity and debt structure''.
CMA's balance sheet shows its total bank debt had increased by almost $2 million to $162.8 million since June 30. Since late 2008, CMA has raised more than $80 million from share issues, including handing almost half the company to German recycling giant Scholz Invest. Most of the cash seems to have been used as working capital. There has been speculation that Scholz may sell some of its Asian region assets to CMA, in exchange for further shares, to enlarge and shore up the balance sheet. CMA has not commented on that.
ANZ agreed last week to give CMA another $16 million, $12 million for buying stock and $4 million as an overdraft, on top of about $110 million it is already owed. CMA said it had agreed to begin reducing that debt from October, although it did not say by how much.
Auditors Deloitte signed off the half-year accounts by noting the group's continued losses and the fact that its debts due within the next 12 months exceed current assets by more than $20 million.
