The net debt of MMK fell by 83% in 2016.
The reduction of the net debt stayed a priority goal for the company’s management in 2016. The sources of the debt settlement were the operational cash flow, cash inflow from the sale of a package of shares in Fortescue Metals Group (FMG) and the remaining funds on the company’s accounts. As a result at the end of 2016 the total debt of MMK fell by $1 bln 347 mln against the end of 2015 and made up $500 mln. The net debt as of the end of 2016 made up $192 mln having fallen by 82.9% or $932 mln. The reduction of the net debt resulted in the net debt/EBITDA ratio of 0.1 as of the end of 2016.
In 2017 MMK plans to keep the debt at the current level. A significant outflow of funds for the settlement of the debt led to the reduction of the monetary liquidity volume on the company’s accounts to $308 mln (including monetary funds and their equivalents at the volume of $266 mln and short-term deposits for $42 mln). This volume of monetary funds fully provides the current operational activity of the company, MMK says.
In the current market conditions this reserve of funds is below the comfortable level and the management plans to increase the level of monetary liquidity on the company’s accounts by the end of 2017 to about $0.5 bln.