By Nick Stride
Friday 28th April 2000 |
Text too small? |
![]() |
Contact announced late last month it would buy back 5% of its shares on the market from March 31. It said the shares were trading at a "substantial discount" to their fair value. The buyback was "a highly attractive investment opportunity."
The programme also gave Edison, which owns 40% of Contact, a temporary reprieve from the demands of its financiers.
Edison paid for its Contact buy partly through the issue of Edison Contact Finance Ltd redeemable preference shares. The terms of the $400 million issue specify a debt-to-valuation ratio of 0.65, meaning Edison is in breach of the terms if Contact's share price is below $2.55 on May 14, just two weeks away.
For every 1c fall below $2.55 Edison must stump up a margin call of $2.43 million. At Wednesday's closing price of $2.43 the bill was $28.3 million.
The terms give Edison an unspecified "cure" period to remedy a breach. But with Contact's share buyback failing to prop up the price the US company may have to come up with another tactic.
The buyback programme aims to gather 30.2 million shares, but at the close of trading on Wednesday it had secured only 2.87 million shares at a cost of $7.4 million.
No comments yet
IKE 1Q FY26 Performance Update
July 29th Morning Report
General Capital Annual Shareholders Meeting Results
MEE - Receivers and Liquidators appointed to King Honey
2 Cheap Cars Group Updates Performance Outlook for FY26
Spark announces Director changes as part of Board renewal
July 28th Morning Report
KMD Brands announces new Group Chief Financial Officer
Commerce Commission to issue SOI re Viridian application
FBU - Moody's affirms FBU Baa3/stable rating