Working capital is the issue. They're just not generating the profits across the board to give support to loss-making DX. Logistics are improving (as well they might) but there are still major hurdles to be overcome. Very competitive market with DHL and PO being the big-hitters. Don't see a quick fix here. Maybe hive-off DX to let it sink or swim according to its own performance, rather than pulling the entire ship down under water???
'The Gatemore Loan is an unsecured Â£2.0 million bullet loan with simple interest of 10% per annum rolling up from date of advance, which is expected to be 29 September 2017.Â Repayment of the loan is due by 30 November 2017, with no early repayment penalties.'
But will it result in a dilution? Probably. Can't see any other way that they can raise the capital needed to make up for the shortfall in revenues which are going to be further impacted by the new loan and rent, both geared at 10% which is pretty punchy. Wonder how much HSBC were charging? Co's on the ropes always get screwed on financing terms. DX no different there.IMHO, it's going to be a long haul to get this motoring again.
DX Group and Menzies have announced that negotiations regarding a potential merger between DX and Menzies Distribution division have been called off.
In a statement DX Group said that they had been unable to agree suitable terms and had therefore decided to continue with its plans for business transformation on a stand-alone basis.
For its part, John Menzies issued a statement in which it said: the John Menzies Board does not believe it is currently possible to agree a revised set of terms with DX for the combination which would be in the interests of John Menzies shareholders.
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