If the Total Leverage Ratio is not changed as part of the revised facility agreements presently beingnegotiated, or if a breach were to threaten or to occur, that breach could be waived by the syndicatemembers, or be prevented or rectified by a capital raising or by significant asset sales.
The magnitude of the likely required capital raising or asset sales is such that there can be no assurance that these could be achieved. That magnitude is even greater if the financial ratios were to remain as currently stated.
If a breach occurred and was not waived or rectified to the satisfaction of the bank syndicates, they would have the right to require immediate repayment of total syndicate debt and the closing out of derivatives entered into with syndicate members. If the bank syndicates exercised those rights, it is likely that assets would not be realised, and liabilities would not be discharged, in the ordinary course of business.
Despite these significant uncertainties, the directors have concluded that there are reasonable grounds to believe that the going concern basis is appropriate.
So does this mean that they believe going concern is an issue, though that their are ways such as capital raising around it?
IIF Price at posting:
18.5¢ Sentiment: Buy Disclosure: Not Held
