Cash levelAccording to Acumen, Anderson has less than $20MM of cash left after cap ex in Q4. Depending on how much they spend in Q1 this could dip down to near $10MM. Their first series of debentures are due in less than a year so they urgently need to figure out how they will pay for these or try to extend them.
Analysis: In our last commodity update we changed AXL’s recommendation to REDUCE. Despite drilling strong Cardium wells, at current commodity prices we believe the convertible debt requires restructuring before the common equity is investable. As a reminder, the first debenture of $50 MM is due January 2016 and the remaining $46 MM comes due June 2017.