Mart Resources Inc MAUXF

Distribution of dividends vs debt covenants

[Fernando2010]

I understand that, generally, financial debt carries some covenants limiting the payment of dividends when certain financial ratios (net debt / operating cash flow ratio, for example), goes below certain minimum values.

In case the company make a distribution prohibited by the debt agreement, this situation will be considered an "event of default", triggering the inmediate repayment of all of the debt outstanding.

Considering the deterioration of our cash flow in recent months (due basically to increased pipeline losses), what are the chances of the next dividend being restricted by the covenants of  the debt agreements?

Comments are welcomed as usual

Thanks in advance

Fernando