TSX:DA.DB.A - Post by User
Post by
Mongoose11on Apr 26, 2013 10:03pm
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Post# 21309122
Debt noose
Debt noose According to my napkin calculations there should be about 18 million of cash flow available to pay down debt in FY 2014. That would eliminate $1.5 million in annual interest costs which is more than the entire profit of a $229 million revenue company.The highest rate debt (ignoring the debilitating Clairvest debt) is the DA.DB.A debentures at 8.375%.
If at least a significant portion of the 18 million doesn't go towards debt retirement there is clearly something seriously wrong. Given that their operations contribute basically zero in net profit a return on debt repayment of 8.75% is a vast and simple improvement.
Efficiency savings is even more promising, starting with the apparent surplus capacity at Air Tindi. Imagine what cutting all the overhead that is contributing zero incremental revenue would do to the bottom line?