There's a lot of good discussion on this forum about the upcoming catalysts for CTP that have been pretty well signaled by management: GSA, reserves upgrade, and bottom line improvements due to regulatory change.
Based on the latest quarterly report, CTP has $79m outstanding of a partially amortising loan with Macquarie. Each quarter CTP repays $1m principal and approximately $1.5m interest, which floats at approximately Bank Rate + 6%.
The loan from Mac currently needs to be repaid September 2020, meaning a $70m balloon. Assuming NGP revenues starting around Jan next year, that gives only 7 quarters to repay this out of operating cash. With managements most recent guidance, this cannot be repaid through expected earnings over the period - and in any event paying down debt is unlikely to be the best use of that cash given CTP's enviable set of growth options. I'm sure most shareholders would agree with me that deleveraging is not the best use of CTP's free cash (dare I say dividend, anyone?).
In my opinion and using my own calculations, a 2018/19 refinancing is needed in order for the company to continue operations in 2020 and fund its growth programme. Without it there is the lingering question of more equity dilution on the not-so distant horizon and I think this will ultimately restrain the share price upside for our company even through this current period of outperformance/growth vs peers.
I hope that RC and the management team provide guidance to shareholders on debt capacity and refinancing in the coming quarters (although I should also mention that I think management's recent communication has been very good and this is not a criticism). In my opinion it is the refinancing of this debt at a higher level and longer tenor that is the real catalyst to truly unlock shareholder value in CTP over the next 12 to 18 months. Some positive newsflow on this would really move the needle on the SP, in my opinion. Interested in other views.
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