TSXV:JTR.H - Post by User
Comment by
happyhuntingon Jul 29, 2019 11:58pm
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Post# 29973237
RE:Restructuring
RE:RestructuringSo after a 3 week delay, the results are finally released. As I anticipated, they are bad, but even I hadn't expected them to be quite as bad as this! Collapsing revenues, shrinking margins, increasing costs, goodwill impairments - it's all there in glorious technicolor. Of course, if management are to be believed, it will all miraculously turn around in the next quarter - that same old refrain is somewhat lacking in credibility now.
The biggest concern here remains the debt. Looking at the financial statements, TD have reduced their ABL facility fron $15m to $10m but with heavy losses continuing that must be almost fully drawn down - even after Kiju sale consideration. It is due for renewal in October - hard to see TD wanting to maintain exposure to this disaster. There is also $7m of VTB loans to be paid to the seller of GoVeggie at the end of 2019. In the meantime GSB are drawing down more expensive debt from their new facility - now $3m out of the $4m available.
Most likely outcome of strategic review remains a firesale of brands to pay off debt holders, with shareholders left with whatever is left - that is unlikely to be any more than the current share price and equity value. Short term, it is easy to see this going to $0.15 or less.