Fishing no good today...popcorn gone cold now. Maybe the optimists have been shell shocked by the lack of eps growth the brokers are forecasting and don't know how to possibly put a positive spin on that ?...but I am pretty sure they'll find a way to do exactly that at some stage soon lol
With OCA at $1.12 I'm busy pondering a top up there
That price is Nuttier than a jar of peanut butter, mop them up while you can.
LOL, hope that's not the smooth peanut butter variety
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
The last set of accounts for Dorchester before they became a car company (did have 20% of Turners at the time) showed finance Receivables of $38m with debt of only $18m
Numbers are much higher these days but debt is higher than Finance Receivables ....increasing leverage to the limit?
Shareholders who believe that TRA is in a debt straight jacket might be interested to see how the debt measures up against the banking covenants listed in the respective bond prospectuses.
From p34 of the TNRHB & p 'Something' in theTRA100 bond prospectus, the TNR banking covenants:
1/ Interest Cover Ratio:
EBITDA/ Total Interest > 3.5
2/ Leverage Ratio:
Gross Debt / EBITDA < (Requirement). Requirement varies as below
Period
Requirement
Issue date to 31/12/2014
3.75
01/01/2015 to 31/03/2015
3.50
01/04/2015 to 30/06/2015
3.00
01/07/2015 to 30/09/2015
2.75
01/10/2015 to 30/03/2016
2.50
01/04/2016 to 30/06/2016
2.25
01/07/2016 to 01/09/2018
2.00
01/09/2018 to maturity
2.00
Time to put the position of TRA under scrutiny at the 31-03-2018 balance date.
Granted all of this is historical. But it does appear that on balance date (31-03-2015), TNR was in breach of its banking covenants (the Gross Debt/ EBITDA figure)! Furthermore the first covenant was only rescued because of a write up in the share value of TUA shares because of the takeover offer! This is desperate stuff. Those directors at the AGM deserve a grilling!
Have I made a mistake in calculating particularly that latter bond covenant? Yet the Target Requirement Value in that latter covenant has varied a lot since FY2016. Is it just that banks are willing to be quite flexible with this one?
SNOOPY
Last edited by Snoopy; 08-12-2018 at 01:27 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
Snoops ....that debt/ebitda thing might only apply to (certain/all) bank debt and not total debt
Is banking covenants eh so only want to look after their own money and not worry about other lenders like bond holders
Just a suggestion
I am pulling out all stops to get the relevant debt down. At your suggestion Winner I am only using the bank debt and subtracting off the cash balance. I am also using the figures averaged over the year, not just at the end of the year.
Net Debt / EBITDA = [0.5($230.459m+$191.708m) - 0.5($25.146m+$69.069m)] / $51.103m = 3.20 > 2.0 ( => fail test )
Still not low enough! :-(
SNOOPY
Last edited by Snoopy; 08-12-2018 at 06:26 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
I am pulling out all stops to get the relevant debt down. At your suggestion Winner I am only using the bank debt and subtracting off the cash balance. I am also using the figures averaged over the year, not just at the end of the year.
Net Debt / EBITDA = [0.5($230.459m+$191.708m) - 0.5($25.146m+$69.069m)] / $51.103m = 3.20 > 2.0 ( => fail test )
Still not low enough! :-(
SNOOPY
Maybe debt is a little high ...and they have $30m of undrawn facilty as well (I think)
”When investors are euphoric, they are incapable of recognising euphoria itself “
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