CANEXUS CORP 6.5 PCT DEBS T.CUS.DB.D

The right CEO for the worst of times...

[a1broker1]

The CEO is proving himself to be the right CEO for the worst of times.  Much of what has gone wrong has happened either before his tenure or because of factors totally beyond his control (oil price collapse, etc).  The Q1 results are nothing less than impressive in view of the most difficult of circumstances with which he has to contend.  The tough decisions are being made, costs are being cut wherever possible, cash is being generated, the onerous debt load is at least in check.  Most importantly, the CEO with his BIP, is positioning Canexus to ride out this storm without selling valuable assets at fire sale prices.  By instituting the measures outlined in the BIP, the company will remain cash flow positive, live to fight another day, and hopefully dispose of assets in a better environment at better values.

 Don't get me wrong.  In no way do I excuse former management for loading the balance sheet with onerous debt, repeated cost overruns, and general mismanagement.  Nor do I minimize the extremely difficult challenges ahead.  But given the dire present situation, I am happily surprised to see the speed at which positive changes as outlined in the BIP are having distinct early financial benefits.  Doug Wonnacott has a very difficult road ahead, but  he is now navigating it well with careful precision.  A year from now, patient investors should be rewarded.  Q1 results are early evidence of this.