Q: Can you give your opinion on the lion financing deal announced today?
5i Research Answer:
For a $745M company a US$142M financing is a big deal, with about half of that being convertible into shares. But, debt will increase about 75% overall. We can't add much here: as a growing company it is going to require capital. The buyers were a wealthy family foundation (Saputo) and a Quebec pension fund. But the terms (13% and 11%) are fairly onerous, reflecting the higher risk of the debentures. LEV remains in a highly negative cash flow position and still losing money.