RE:RE:Notice of Withdrawal ,Oct 5The public traded debentures, by their nature, have their covenants disclosed. A private debt facility, by its nature, remains private to some extent due to the lender, for competitive reasons and in dealing with future facilities, wanting some of the terms to remain private.
Poydras has complied, of course, with the reguluatory requirements for disclosure. There are some terms they can't disclose.
The convertibles were coming due next March. The debt had to be refinanced. Secondly, their 2-3 year vendor debt too closely matched the 2-3 payback of capital from slot machine placements. The new facility is 5 years which allows them to invest cash flow in growth - not through the equity financings that you were assuring everyone were coming.
Not one of the current or potential investors that Peter, James and myself met with in Toronto last week were concerned about the new facility or the details of the covenents. Suffice it to say, Peter is very happy to have taken the converts out, because those had very onerous covenants compared to the new facility. Everyone we met with views this as a positive.
Perhaps you should have taken me up on my previous offer to set up a meeting with Peter when he came through Toronto. But you didn't. You could have asked these questions directly.
Keith
krichards@national.ca
Teflon2Hype wrote:
Riddle me this; Why does a company take out a 13% debt facility with undisclosed covenants to pay off 12% debt instruments with disclosed covenants? Why increase your debt load by over 8% and hide the conditions of that loan agreement from your shareholders when at face value none of it seemed to be necessary?
One of the secrets to making money is having foresight as sharp as your hindsight. Some time in the future we shall openly discuss the QT.