Compelling case for an investment., page-27

@bensterz

I have a question for you, if I may.

At the post below, I raise the subject of the "debt servicing cost coverage" covenant.

http://hotcopper.com.au/posts/16554425/single

If business conditions in the sector continue deteriorating, I believe there is a very real chance that EBITDA will drop substantially, likely causing a breach of the debt servicing cost coverage covenant. If this was to happen, regardless of the fact that the debt amortisation schedule may be satisfied (via asset sales and working capital recovery), do you have an opinion on what the consequences may be?

Thanks, Mars