Sir Royalty Income Fund T.SRV.UN

RE:Hot off the press...

[Wordless1]

That's grim. Sounds like they are warning the market that there is a realy liklyhood that the bank isn't going to be providing covennat waivers any more.

SIR owes SRV somewhere around $11M in deferred royatlies, yet SIR has about $2M in cash and a bunch of deferred rents that will have to eventually be repaid if they don't fold before that. SIR's balance sheet is a scary thing. Current assets if 15M and current liabilities of $123M... Sure back out the debt as its now classified as current, but $22M in payables alone and $39M of long-term debt.

Going into bankruptcy protection and renegotiaing those debts with their creditors like their landlords and SRV.UN, to make a lot of that debt go away appears to be the only real way they can survive this mess. SRV needs SIR to survive so I woudn't be surpsised if in one way or another, most of theose deferred royalties go away and are never paid.

One of the ugliest balance sheets I've ever seen. I have no idea why anyone would be buying SRV.UN right now. The Operating Company is on the brink with no real way out. Best of luck if you're holding this. I wouldn't touch it with a million foot poll looking at that balance sheet.