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Microcap & Penny Stocks : Dominion Bridge Corp. (DBCO) -- Ignore unavailable to you. Want to Upgrade?

To: Harry_Behemoth who wrote (366)	1/16/1998 9:43:00 PM
From: david james	Read Replies (3) \| Respond to of 535

Here are a couple of choice bits from item 7 that look especially ugly. Management looks to be pretty inept. Since November 1997, Davie has been engaged in the upgrade of the Spirit of Columbus. The Company has yet to obtain financing for this project and has been incurring costs on behalf of Davie of approximately $1 million per week. As of the date of this Report, Davie has not received any progress payments for the work performed. In order to reserve limited working capital, the Company has determined to cut back on the scope of work authorized until such time as progress payments are received and financing is in place. _________________________________________________________________ As of the fiscal year-end, the Company had a $30 million credit facility from BTCC, of which $15 million was outstanding as of September 30, 1997. This facility provided funding for the Company's acquisition of MDC. Subsequent to year-end, the Company entered into a $40 million credit facility (the "BNY Facility") with a syndicate led by BNY Financial Corporation - Canada ("BNY"). The BNY Facility was used to pay off BTCC and to provide working capital for the Company's North American operation. The amount available to the Company under the BNY Facility is based upon a percentage of the value of certain eligible assets of the Company, including the MDC shares owned by the Company and the accounts receivable, inventory and property, plant and equipment of the North American operations. The BNY Facility matures in three years and bears interest at a floating rate based upon BNY's prime rate. The BNY Facility agreements provide for an acceleration of the maturity date in the event of an "Event of Default" (as such term is defined in the BNY Facility agreements). An Event of Default includes failure to pay when due any installment of interest on or principal of the Facility and any failure to observe the covenants provided in the BNY Facility agreements, including certain financial covenants. The BNY Facility contains various financial and other covenants including maintaining a minimum shareholders equity of $52 million as of September 30 and December 31, 1997. This covenant was not met on these dates and constituted a technical default under the BNY Facility. The Company has negotiated waivers for these defaults. The Company is currently negotiating a waiver of or a revision to the shareholders equity and other covenants contained in the BNY Facility for the remainder of fiscal 1998. There can be no assurance that such negotiations will result in a waiver or revision of such covenants. The Company's failure to successfully negotiate such waiver or revisions would adversely affect the Company's ability to obtain necessary working capital and would have a material adverse effect on the continuing operations of the Company.