GREY:CLIRF - Post by User
Post by
PB83on Mar 01, 2012 12:30pm
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Post# 19611576
Implications of News Release
Implications of News Release Reading this release, I'm a bit encouraged but also a bit puzzled.
Positive that they were able to secure project financing. The rate seems high, but this is a very risky company.
Positive to diversify funding sources away from equity and prevent further dilution. Although adding debt means that equity holders will be left with very little if the company goes bankrupt (unlikely in my opinion given the major shareholders backstopping the company). Also positive as it improves the balance sheet and gives them more credibility when bidding on projects.
Curious why it was structured as a 20 year term loan. Wouldn't a revolving loan be more approprite if the loan relates to project finance?
Overall, seems like a small but positive step in the right direction. Patience is a virtue.