BusinessCompany NewsXstrata could breach banking covenants

Xstrata could breach banking covenants

Analysts warn that falling coal prices could, in turn, push Xstrata to breach debt covenants

Mining group Xstrata has the potential to breach banking covenants, analysts
have warned.

Tumbling coal prices could hit the Xstrata’s revenues for 2008 and 2009,
which could force it to breach debt covenants of three times gross debt to
EBITDA on $10bn (£6.7bn) of bank loans, reported the Telegraph.

‘There is a possibility that Xstrata may breach this covenant in December
2009 earnings, ‘wrote UBS analysts Grant Spore and Paul Galloway.

‘We believe that consensus earnings before interest, tax, depreciation and
amortisation for 2008/09 of around $11.1bn are still too high and are likely to
come down further in the next few weeks.’

Further reading:

Criticised companies come top in
CSR reporting

ACCA sustainability awards
shortlist announced

Related Articles

M&S business rate liabilities based on £570m rateable value

Company News M&S business rate liabilities based on £570m rateable value

4m Emma Smith, Managing Editor
BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

8m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

12m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

1y Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

1y Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

1y Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

1y Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

1y Emma Smith, Managing Editor