GREY:XEBEQ - Post by User
Comment by
LyChaunceyon Oct 14, 2022 3:02pm
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Post# 35025471
RE:RE:72. in Second Report to the Court submitted by Deloitte
RE:RE:72. in Second Report to the Court submitted by Deloitte1) As you can see in the Appendix B, liquidity will become very tight within a month if they decided to pay down the 25 millions. They choose to make sure contracts execution by paying suppliers and wages by delaying debt payment through CCAA.
2) Secured bank loans has coverage maintenance test. The companies' lastest earning reports are so bad which messed up with the coverage ratios requirement. My guess is that the banks are really strict with the coverage maintenance test so they can not compromise. And of course Xebec's ugly earning reports with the legacy contracts for the last three quarters' earning reports definitely destroyed any confidence left from the creditors(or equity investors as the stock prices have shown).
3) You are right. It is abosolutely difficult. My hope is that a decent q3 result with positive EBITDA will attracts distressed bond or even equity investors (Best case scenario is a coverage maintenance ratio fix for the bank loans but I don't want to rely on it). OTHERWISE, we can only hope for a reasonable priced asset sale. The worst situation is of course that EDC, NBC and FSTQ becomes vulture funds with their 40 million and asking for cheap shares to dilute current equity owners.