On October 3rd, 2011 General Maritime Corporation (NYSE: GMR) entered into a waiver agreement with its lenders to suspend the minimum cash balance covenant through November 10th, 2011. (The minimum amount was $35,000,000 through the end of 2011, as of the latest amended credit agreements). In this brief review we analyze the likelihood that GMR will be able to meet this covenant once it is reinstated on November 11th.
As of June 30th, 2011 GMR had cash on hand of $58,591,000. Based on the company’s reported results yesterday, during the third quarter of 2011 GMR used a total of $20,698,000 in its operating, investing, and financing activities. Therefore GMR had cash and cash equivalents of $37,893,000 as of September 30th, 2011.
We assume that GMR applied the $7,045,000 scheduled amortization payment on September 30th, as a reduction of the 2010 Credit Facility. We also assume that GMR used the net proceeds of $8,100,000 from the sale of Genmar Revenge (The sale closed on October 26th) towards further repayment of the 2010 Credit Facility.
Given these two assumptions and the amount of cash on hand as of September 30th, we estimate that cash & cash equivalents plus revolver availability amounted to $53,388,000 on a proforma basis.
Based on the above analysis, we believe that there is a high likelihood that GMR will have enough cash and revolver availability to meet the amended covenant requirement once the current waiver expires on November 10th.
As of June 30th, 2011 GMR had cash on hand of $58,591,000. Based on the company’s reported results yesterday, during the third quarter of 2011 GMR used a total of $20,698,000 in its operating, investing, and financing activities. Therefore GMR had cash and cash equivalents of $37,893,000 as of September 30th, 2011.
We assume that GMR applied the $7,045,000 scheduled amortization payment on September 30th, as a reduction of the 2010 Credit Facility. We also assume that GMR used the net proceeds of $8,100,000 from the sale of Genmar Revenge (The sale closed on October 26th) towards further repayment of the 2010 Credit Facility.
Given these two assumptions and the amount of cash on hand as of September 30th, we estimate that cash & cash equivalents plus revolver availability amounted to $53,388,000 on a proforma basis.
Based on the above analysis, we believe that there is a high likelihood that GMR will have enough cash and revolver availability to meet the amended covenant requirement once the current waiver expires on November 10th.
