MDC Partners, the Canadian based publicly listed marketing group that owns Crispin Porter & Bogusky, added another $US 84.7 million to its accumulated losses in 2011, despite increasing revenues by 36.9%. The group lost $57.7 million in the latest quarter alone.
The massive and ever-increasing accumulation of losses has reached $231 million with the result that shareholders’ funds are now in deficit by $12.9 million. So instead of relying on shareholders’ funds for much of its capital, the group depends entirely on bank borrowings of $377 million, advance billings to clients of $122 million and $137 million owed to vendors of acquired companies.
The group also faces the prospect of having to find $107 million to buy out minority shareholders in subsidiary companies under existing option agreements, not to mention the cost of buying the US media agency RJ Palmer last month (see Bids and Deals: January 2012).
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