The key deadline RCY faces is when its performance is tested against its banking covenants. I have looked for the actual wording of the covenants but cannot find them anywhere at this stage. Essentially, one would expect them to test whether or not RCY's revenue minus operating costs is sufficient to pay interest on the debt plus make repayments of principal. At current traffic rates I would have thought they will struggle. That would then constitute an event of default and give the financiers the right to appoint receivers. End of my investment.
What RCY does have going for it is time! The test against banking covenants does not occur for 18 to 24 months. All stakeholders will be looking at whatever they can do to improve traffic flow. The connextion with the Brisconnections link is key in this regard.
RCY Price at posting:
2.6¢ Sentiment: Hold Disclosure: Held
