Post by
doncristobal on Feb 15, 2017 7:38pm
Waiver and Amendment to Credit Agreement
Currently looking into this company. I am trying to understand this section:
"Pursuant to the Amendment, Tangelo's obligations to repay principal of US$14 million on or before December 31, 2016 has been amended and the Company is now obligated to pay the greater of US$10 million and 90% of the proceeds of any equity or M&A transaction completed by Tangelo on or before March 31, 2017." (Press release Jan. 10, 2017)
Is this saying that if the company (or its assets) are sold for, say, $50m next month, $45m of these proceeds flow directly to the lenders, and $5m remain for the shareholders?
Comment by
lscfa on Feb 15, 2017 8:29pm
The amending agreement has not been filed on sedar yet to double check the wording of the news release. The co. owes $83 mil Cdn in debt so this suggests to me that some kind of merger is brewing where say $10 - $20 million US in cash is injected into co.....handing the cash over to the lender is no big deal as the co. is generating more than enough cash flow to service the debt....