Options kitty aids RMG balance sheet

By Phil Boeyen, ShareChat Business News Editor

Monday 25th June 2001

Credit and receivables business RMG (NZSE: RMG) says it will use A$8.8 million from share options to repay debt and fund further growth.

44 million former Frontier Petroleum options on issue will provide the cash, converting at A20 cents per option.

CEO James Boult says the capital raising will place the company's balance sheet on a sound footing.

"The funds will be used for preliminary debt reduction but also some retained against possible future business development projects which the board may elect to undertake in the future.

"This will ensure the company is in a sound position prior to the commencement of the new trading year on 1st July 2001."

The firm underwriting the options, Burdett Buckeridge Young, is bullish on RMG's future.

"We believe RMG is poised for a period of significant profit growth," says Iain Maine, head of corporate finance.

"We are impressed with the way in which the company appears to have maintained its service standards and customer base since its creation."

Mr Maine says giving former Baycorp executive Jim Boult the top job at RMG is an "outstanding appointment, and completes the management team that will drive the business forward strongly."

RMG has so far failed to fulfill initial market expectations, having become bogged down in the logistics of streamlining more than 20 separate businesses into a profitable whole.

The appearance of Jim Boult has sparked some life into the company's stock although investors are awaiting end of June results to see if the company is managing to pull itself into shape.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Special Report: Strathmore Untangled