I recall they stated that the impact of the Carbon Tax was around $28m pa. If they are only generating a $26.3m EBITDA they then cannot pay any interest and are insolvent subject to the Government assistance.
The dispute is around passing through the Carbon Tax so I suspect that AEJ is charging through to the customer but they are not paying it. The cash squeeze will depend on whe AEJ needs to make an instalment of the Carbon Tax to teh ATO and if $28m is the annual amount then they may be up for around $14m.
The directors have always said that this is a risky investment that was teetering. If the arbitration is favourable then we dont have any issues, however the lenders will still want to refinance/recapitalise.
If the arbitration is unfavourable then the lenders want to work with the directors to sell the business without taking a loss re "distruction of value"
AEJ Price at posting:
$8.33 Sentiment: Hold Disclosure: Held
