Akita paid $6.8 million in interest in 2022
They had $94,759,000 of LT debt.
The interest they pay is
The Credit facility expires in September 2026. The interest rate on
the Company’s credit facility ranges from 175 to 300 basis points over prime interest rates
depending on the Funded Debt(1) to EBITDA(1) Ratio
To be conservative,lets take the MINIMUM 175 basis point.
6.45% + minimum 1.75% = 8.20% x 94,759,000 = $7,720,238 yearly saving / 39,734,191 shares =
annual saving of interest on the debt of 20 cents / shares.
By eliminating their LT debt( by the end of 2025 or early 2026)Akita will be adding EPS of 20
cents / share or 17 cents if you use what they paid in interest in 2022.
Since Akita has a huge pool of tax asset loss,this 17 to 20 cents differential (2025 VS 2022)
will flow directly to the bottom line once debt is illiminated.
Akita was paying a 34 cents / share of dividend in 2018.
Akita could easily earn north of 70 cents and it trades at $1.50.That a P/E OF 2.
If they elect to go back to being a debt free company what will they do with all of the excess
cash.
If the stock is still as cheap as it is, will they do a NCIB or will they start paying back a dividend?
If it's a dividend, it would not be reasonable to think that we would get 34 cents initially but
10 to 12 cents is more likely.Combine this with some share buy back...
Akita is thriving in a harsh environment imagine if the oil price pick up?
So far, I HAVE BEEN WRONG ON MY CALL.
I was more than 12 months early in my position building and may still be a few months away
from the start of what i think will be a major appreciation of the stock price.
As you canread from my posts,i am as confident if not more in the prospect of my company.
Will i be right or wrong.Only time will tell.
In the mean time, i will be adding to my position if the stock goes back under $1.40 like i have
done recently.
See you later.
P.S. i am a big believer in Akita management ability.