With all due respect, saying the previous covenants are "not relevant right now" is absolutely 100% wrong. It is all about the covenants. We know that they could not have achieved a sales value loan condition purely because the price of spod fell through the floor. We know that they have missed a repayment milestone. Another loan condition I reckon they are likely to have been breached (I can't be sure as I haven't seen the detailed loan facility agreement documentation and don't know if this is a condition or not) relates to their cash on hand.
These items are undoubtedly being negotiated with any potential new (or existing) finance provider.
This is corporate finance 101 and really needs to be understood (by investors) if you are investing in companies that utilise project/ debt financing facilities.
AJM Price at posting:
7.0¢ Sentiment: None Disclosure: Not Held
