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Gold/Mining/Energy : Synex International Inc. (SXI.T)
SXI 228.94-2.4%3:59 PM EST

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To: Ally who wrote (13)8/17/1998 11:49:00 PM
From: gsun  Read Replies (1) of 42
 
dt:

Delayed response due to my holidays (thank you Dick Martin for your response).

There may be opportunities for SXI depending on how Ontario Hydro is privatized. SXI would likely focus on the smaller plants as the capital requirements are far less and operational efficiencies more likely to be achieved.

Maximum debt level for hydroelectric plants (assuming long term power sale contracts and long term debt) is about 80%. The debt on the software division is nearly zero as it has effectively no fixed assets (only software code and reputation) and sells most of its product outside of Canada. I am uncertain how one would determine an acceptable debt level rather it is more important to match the debt payments to the dependable income stream and thereby avoid excessive exposure to interest rate changes.

gsun
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