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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Dale Baker who wrote (125231)10/27/2009 8:50:26 AM
From: Ed Ajootian  Read Replies (1) of 206178
 
Dale, followup on MHR -- I didn't mean to downplay them getting that new facility. $150M is a big step up from where the old one was with CIT, $65 M (see PR that announced the old one at petroresourcescorp.com , issued 9/9/08). Also, given the problems that CIT is having, its not at all certain that CIT would have been in a position to increase the availability on that line in any event.

The days of 4:1 or 5:1 leverage on new acquisitions are over unfortunately. I'm not sure what the banks will lend these days. A wild hunch would be, say, 2:1. So if MHR can do a quick equity raise of $10 M that would mean they could then go out and do a $30 M acquisition, with the balance of the funds coming from this new line.

But the ball doesn't really start to roll until they raise some more equity, the way I see it.
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