Shareholders should appreciate the importance of today’s announcement that CEMATRIX has signed an operating line credit facility with Canadian Western Bank. At the outset of 2015, which turned into a record year for CEMATRIX, RBC determined that it was unable to provide the level of working capital financing required by CEMATRIX to support the forecasted sales growth that management had predicted.
CEMATRIX was then faced with a situation that if its business activity did in fact rapidly escalate as forecasted, it’s working capital flexibility was severely restrained. In order to remedy this situation, CEMATRIX management, with the assistance of RBC, was diligent in securing a credit facility with Tallinn Capital in May of 2015. for up to $2 million. This would fund operations through its busy season by way of factoring an interim Mezzanine loan to replace its former credit facility. Although the money was expensive, carrying a 16.5% to 22% interest rate, it was necessary for CEMATRIX at the time to achieve a successful year.
As a side note, management believes close to 90% of its 2016 revenues will be driven by infrastructure projects.
Today, CEMATRIX announced it has signed a credit facility with Canadian Western Bank for up to $2 million bearing an interest rate of 4.70% or 2% above prime, whichever is greater. It should be noted that management has been extremely complimentary to Tallinn Capital for the support it provided to CEMATRIX and the lending group also played an important role in solidifying the new relationship with Canadian Western Bank.
The timing of this news is most welcome as CEMATRIX announced this past January that it exceeded its forecasts for 2015. Management is on the record that it expects 2016 to be even more robust. Audited 2015 year end results will be released in early March.
To view today’s news release, please click here.