Company news: Emeco
Emeco purchased US$52.3m of its own US-based debt, at 60 cents in the dollar (this ties into the debt discussion above, with some of the US debt holders preferring to lock in a certain return given the current difficult conditions for US low grade debt, rather than wait to the debt maturity in Mar-19). This will reduce the company's interest cost by ~$5.2m per year. Proceeds from the partial closeout of an in-the-money interest rate swap were used to fund the debt purchase. We see this as a positive development for Emeco, as it has strengthened the balance sheet of the company markedly. In addition, it has boosted the book value per share of equity by 19% (to $0.44ps from $0.37ps). This compares to a current share price of $0.042cps, or 9.6% of its net asset value.