Newalta has also amended the terms of its credit facility with its Canadian lending syndicate. The key change is an increase of funded debt to EBITDA covenant from 3:00:1 to 3:50:1 for the rest of 2009. Other amendments will offer advance flexibility to supervise working capital, issue performance bonds, and absorb the restructuring costs. At the election of the company, the principal amount of credit facility was decreased from CAD425 million to CAD375 million, leaving unused capacity of about CAD65 million. The maturity date remains October 12, 2010.
The management has restricted the capital expenditures for 2009 to CAD40 million, which includes CAD25 million for growth capital and CAD15 million for the maintenance capital. Of this amount, CAD15 million of growth capital will be reserved to support the firm contracts, as negotiated, associating to Onsite and Heavy Oil/SAGD projects in the second half of the year. This compares to an initial 2009 capital budget of CAD75 million for the growth capital and CAD28 million for maintenance capital, which was announced in late 2008.
The amendments to our Credit Facility provide additional flexibility to manage our business during these difficult market conditions, stated Mike Borys, senior vice president, finance and chief financial officer. The additional measures we have taken to reduce our costs and funded senior debt will strengthen our balance sheet and better position us to capitalize on opportunities as the economy recovers.
