SIV (ASX) Ann: Preliminary Final Report

Originally posted by CaptainBarnacles ↑

You need to hold your breath and wait for the end of Sep - as per the going concern notes (below), and notes (also below) from page 13 of the financial report.

To speculate a bit: I have noticed that the debt ratio (total liab to total assets) is at 79%, and typically SIV has crap raised once this has got to 74%. This ratio has regularly moved down to around 69%. The amount of cash needed to get down to this 69% level (if this is a key level that matters???) would be an extra $50m. The current market cap is about $86m. So if that was a target, and debt was not available, you might be looking at a 1 for 1 at $1.25 pro rata entitlement offer (or worse). I suspect that they might be looking at subordinated debt to avoid this need to raise capital, but whether they will pull it off is part of the guessing game. I'm not saying a dilutive crap raise is the worst case scenario, it is just one possible scenario I suspect. I don't know what the covenants are. Maybe I missed them - does anybody know what typical covenants might apply to a business like SIV?

f) Going concern
As at 30 June 2018, the Group was in breach of debt covenants under its Syndicated Facility Agreement and its
Securitisation Facility, as a result of the FY18 statutory loss. Waivers were obtained before 30 June 2018, and are in
place until 30 September 2018. As a result of the covenant breach, debt balances have been reclassified to current
liabilities.

The Group is now working with its Lenders to agree revised terms for the agreements governing the borrowings such
that the borrowings are not required to be repaid within the next 12 months. While a level of uncertainty exists, the
Directors consider that there is a reasonable expectation that revised terms will be agreed with the Lenders.
Taking this into account, it is the considered view of the Directors that the Group is a going concern, and the financial
statements have been prepared on that basis.

Capital Structure Notes from page 13:
1 In March 2018, the Group amended its Syndicated Facility Agreement (originally entered in August 2015). The facility has a limit of $350
million and a term of three years. The Agreement was amended to reflect the revised funding and reporting requirements of the
Company post the decision to exit its GoGetta business. The debt is classified as current as the Company has breached its debt covenants
as a result of the FY18 statutory loss. A waiver was obtained before 30 June 2018 and is in place until 30 September 2018.
2 The Securitisation Facility was executed in December 2017. It has a limit of $200 million and is a revolving facility with an original
maturity date of December 2020. The first draw down of the facility occurred in April 2018. The securitised debt is classified as current as
the Company has breached its Securitisation Facility covenants as a result of the FY18 statutory loss. A waiver was obtained before 30
June 2018 and is in place until 30 September 2018.

Expand

Thanks for the good insights.

On the covenant question you raised, the SIV equivalent AXL has the following covenants over a recent debt issue:
- Maximum Debt to Receivables Ratio (85%)
- Interest Cover Ratio Not less than 2.0 times

No.	Vol.	Price($)
1	74822	15.0¢

No.

Vol.

Price($)

74822

15.0¢

Price($)	Vol.	No.
15.5¢	32510	2

Price($)

Vol.

No.

15.5¢

32510

No.	Vol.	Price($)
1	74822	0.150
1	92397	0.145
1	7140	0.140
1	100	0.120
1	110	0.110

No.

Vol.

Price($)

74822

0.150

92397

0.145

7140

0.140

100

0.120

110

0.110

Price($)	Vol.	No.
0.155	32510	2
0.160	6537	2
0.165	25000	1
0.175	4488	2
0.180	440	1

Price($)

Vol.

No.

0.155

32510

0.160

6537

0.165

25000

0.175

4488

0.180

440

(20min delay)
Last 15.5¢		Change 0.000(0.00%)		Mkt cap ! $7.339M

Open	High	Low	Value	Volume
0.0¢	0.0¢	0.0¢	$0	0

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