Bank refuses more funding, Hoyts terminates Brisbane lease
Babcock & Brown Securities Pty Ltd has extended its offer for the MTM Entertainment Trust to 8 August, and has also provided the trust with a liquidity package to cover ongoing operations after Macquarie Bank refused to provide more funding once its existing debt facility fell due on 30 June.
Macquarie did, however, agree to extend its facility to 31 December, on conditions which included an increase in margin to 3% and repayment of $A2.5 million from a rights issue. Under the agreement with Babcock & Brown, MTM must proceed with a rights issue of at least $A7 million, at A26.5c/unit, within one month of the takeover offer closing. The proceeds will be used to repay Babcock & Brown, pay Macquarie $A2.5 million and for working capital.
Under the liquidity package agreement, Babcock & Brown will pay Inanda and Multiplex $A550,000 less for their shares in the MTM management company. If all that proceeds according to plan, Babcock & Brown will go unconditional on its takeover offer on 5 July.
In another development, bid company (Sunderton) director Robert Topfer said Hoyts had purported to terminate its $A425,000/year lease obligation at the South Bank convention & cinema complex in Brisbane. He said MTM had not repudiated the lease and disputed Hoyts’ entitlement to terminate it. MTM has a bid website: www.mtmentertainment.sunderton.com.au.