TSX Trading Symbol: NAL
CALGARY, April 22 /CNW/ - Newalta Inc. ("Newalta") (TSX:NAL) today
provided an update on actions taken to improve overall financial flexibility,
strengthen the balance sheet and reduce costs.
Newalta has amended the terms of its Credit Facility with its Canadian
lending syndicate. The primary change is an increase of the funded debt to
EBITDA covenant from 3:00:1 to 3:50:1 for the remainder of 2009. Other
amendments will provide greater flexibility to manage working capital, issue
performance bonds, and absorb restructuring costs. At the election of Newalta,
the principal amount of the Credit Facility was reduced from $425 million to
$375 million, leaving unused capacity of approximately $65 million. The
maturity date remains October 12, 2010.
Management has restricted capital expenditures for 2009 to $40 million,
comprised of $25 million for growth capital and $15 million for maintenance
capital. Of this amount, $15 million of growth capital will be reserved to
support firm contracts, as negotiated, relating to Onsite and Heavy Oil/SAGD
projects in the second half of the year. This compares to an initial 2009
capital budget of $75 million for growth capital and $28 million for
maintenance capital, announced in late 2008.
In 2009, management realigned the business with market conditions and, as
a result, 250 positions have been eliminated. As well, effective April 1,
Newalta suspended its matching contributions to the Employee Profit Sharing
Plan. These actions are in addition to salary and hiring freezes and tight
controls on discretionary expenditures undertaken in late 2008.
"The amendments to our Credit Facility provide additional flexibility to
manage our business during these difficult market conditions," said 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."
Newalta Inc. is Canada's largest industrial waste management and
environmental services provider and focuses on maximizing the value inherent
in industrial waste through the recovery of saleable products and recycling.
It also provides environmentally sound disposal of solid, non-hazardous
industrial waste. With talented people and a national network of facilities,
Newalta serves customers in the automotive, forestry, lead, manufacturing,
mining, oil and gas, petrochemical, pulp and paper, refining, steel and
transportation service industries. Providing solid investor returns,
exceptional customer service, safe operations and environmental stewardship
has enabled Newalta to expand into new service sectors and geographic markets.
Newalta trades on the TSX as NAL. For more information, visit www.newalta.com.
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable Canadian
securities legislation. Forward-looking information includes, among others,
statements regarding funded debt levels, capital expenditures, savings from
cost reduction initiatives and other expectations, beliefs, goals, objectives,
information and statements about possible future events. Readers are cautioned
not to place undue reliance on such forward-looking information.
Forward-looking information is based on current expectations, estimates and
assumptions that involve a number of risks, which could cause actual results
to vary and in some instances to differ materially from those anticipated by
Newalta and described in the forward-looking information contained in this
news release. Among the various factors that could cause results to vary
materially from those indicated in the forward-looking information include,
but are not limited to, variations in operating results, successful
implementation of growth opportunities, the aggregate funded debt levels of
Newalta, actual savings on cost reduction initiatives, industry conditions,
fluctuations in commodity prices, the availability of financing alternatives,
debt service and future capital needs. Readers should also be aware that the
forward-looking information is also affected by the risk factors described in
Newalta's Annual Information Form and those set forth from time to time in
Newalta's continuous disclosure filings with Canadian securities regulatory
authorities, which are available through Newalta's website at www.newalta.com
and on the SEDAR website at www.sedar.com. No assurance can be given that any
of the events anticipated by the forward-looking information will transpire or
occur or, if any of them do so, what benefits Newalta will derive therefrom.
For further information:
For further information: Anne M. MacMicken, Executive Director, Investor
Relations, Phone: (403) 806-7019