Buffalo Coal breaches debt covenant, gets stay of execution from Investec
With current liabilities surpassing its current assets and exceeding its capitalisation, Buffalo Coal is in serious trouble and in breach of its debt covenants. Its auditor has cautioned shareholders of "material uncertainties" about the business as a going concern. Buffalo, which is a coal miner listed in Toronto and on the JSE’s AltX board, has recorded mounting debt, largely with Investec. Investec can call on that debt, now surpassing R200m, at any time because of the violated debt covenants. Buffalo has a market capitalisation of R352m in Johannesburg. Its shares have never challenged the R2.99 peak reached at the end of 2014 and are now trading near 85c in muted activity. Buffalo recorded a full-year loss of R124m to end-December 2017, compared with a R46m loss the year before, despite revenue rising to R738m from R661m. The company’s total current assets were R184m, up from R136m a year ago, with cash rising to R21m from R14m. However, current liabilities stood at R353m, up f...
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