MXenergy looks to execute required liquidity event by May 29 deadline

By Jennifer Lanning Drey

Portland, Ore., May 21 - MXenergy Holdings Inc. continues to work to execute an agreement to boost its liquidity by the May 29 deadline included in its amended credit facility, Steven Murray, chief executive officer of MXenergy, said Thursday during the company's earnings call for the third quarter of fiscal 2009.

Under the terms of its amended credit facility, MXenergy must deliver to its lenders an agreement for repayment in full of all obligations under the credit facility and/or an equity contribution to the company of at least $75 million by May 29. The agreement must be consummated by May 31.

Murray said MXenergy's third-quarter results have helped to alleviate short-term concern over liquidity constraints experienced in the first six months of the year, but the company remains obligated to execute a liquidity event before the end of the month.

MXenergy reported adjusted EBITDA of $49 million for the third quarter of fiscal 2009, up 54% from adjusted EBITDA of $32 million for the same period in 2008. The increase stemmed primarily from higher gross profits on natural gas and electricity sold, Murray said.

At March 31, MXenergy had $55.2 million of cash, down from $72.0 million at June 30, 2008.

Aside from cash generated through sales, the company's primary source of liquidity is its revolving credit facility, Chaitu Parikh, chief financial officer of MXenergy, said during the call.

At March 31, total availability under the revolving credit facility was $178.9 million, of which $142.8 million was used in the form of letters of credit.

Under the terms of recent amendments to the credit facility, the maximum that can be borrowed under the facility as of May 15 was decreased to $135 million. The amount will step down to $115 million at June 30.

The company has intentionally curtailed sales and marketing activities in response to the amendments and as part of its overall strategy to manage liquidity, Murray said.

MXenergy reported net income of $9.38 million for the three months ended March 31, compared to net income of $25.10 million for the same period in 2008.

MXenergy is a Stamford, Conn.-based natural gas and electricity supplier.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.