Originally Posted by
Snoopy
Amongst this deteriorating financial outlook, you would have expected PGW's banking syndicate to be getting a bit cautious. Maybe they might 'sink the lid' on the amount of capital that PGW can borrow gradually over time, to ensure a disciplined pay back of debt? But no, the opposite has happened. From HYR2024 p26
"On 22nd December 2023 the syndicated bank facility agreement was amended and restated with an effective date of 19 January 2024."
-Term debt facilities are now permitted to grow to $100m (+$10m), with this facility maturing on 27 February 2026. (Amount drawn on this facility @31-12-2023 was $45.19m).
-Working capital facilities are now permitted to grow to $85m (+$15m), with this facility maturing on 27 February 2026. (Amount drawn on this facility @31-12-2023 was $65m).
To put this new 'revised PGW credit limit' into context, the total dividend payout over FY2023 was $21.712m. So it looks like there is plenty of headroom ($55m in long term debt facilities) for a 'new board' -should they be elected- to 'borrow to pay a dividend' - should they so choose, even if the company makes zero NPAT this year. Interesting!