RE:RE:Net DebtHAWK37 wrote:
6milli, the Net Debt was $590 Mn on Sep 30, 2014. Total Debt was $560 Mn. Using Ocean112's numbers for EBITDA ($120 Mn), Canexus ratio of Total Debt to EBITDA will be 4.7 times, which is a violation of their credit covenants (as stated in the Q3 PR). This will trigger a 'cash trap' provision in the agreement, meaning they have to cancel the dividend. These are facts. 60% of the investors in CUS(institutions) are dividend paying funds. If CUS cuts the dividend, they will dump it and the valuation will drop. Franklin Funds have stated publicly that this stock is the dog in their portfolio (and they said that when it was trading at $5). Let Ocean112 buy it all. RH
11. Long-Term Debt and Short-Term Borrowings
At September 30, 2014, $257.2 million (US $225 million and CAD $5 million), (December 31, 2013 - $318 million (US $299 million and CAD $Nil)), had been drawn on the extendible revolving credit facility, in addition to swing line loans described below.
On October 15, 2014, the Corporation amended and restated the extendible revolving credit facility agreement. In addition to definitional changes, under the amended and restated credit facility agreement the Corporation’s financial covenant obligations were revised as follows:
Consolidated Senior Debt to EBITDA Ratio will not exceed:
o For the fiscal quarter ended December 31, 2014, 5.0 to 1.0;
o For each 2015 fiscal quarter and the fiscal quarter ending March 31, 2016, 4.5 to 1.0;
o For the fiscal quarter ending June 30, 2016, 4.0 to 1.0; and
o For the fiscal quarter ending September 30, 2016 and each fiscal quarter thereafter, 3.5 to 1.0
Consolidated Total Debt to EBITDA Ratio shall not exceed:
o For the fiscal quarter ended December 31, 2014, 5.0 to 1.0;
o For each 2015 fiscal quarter and the fiscal quarter ending March 31, 2016, 4.5 to 1.0; and
o For the fiscal quarter ending June 30, 2016 and each fiscal quarter thereafter, 4.0 to 1.0
At September 30, 2014, the Corporation was in compliance with all ongoing covenants (financial and non-financial) and conditions in the extendible revolving credit facility agreement.