OPTI Canada reviewing strategic alternatives, looking to reduce leverage, position for growth

By Jennifer Lanning Drey

Portland, Ore., Feb. 9 - OPTI Canada Inc. has begun its previously announced strategic-alternatives review process, which the company hopes will lead to a transaction that materially reduces its overall leverage and positions it for future phase development, Travis Beatty, chief financial officer of OPTI, said Tuesday during the company's fourth-quarter and year-end earnings conference call.

"We look forward to moving forward with this process in 2010," Chris Slubicki, OPTI's chief executive officer, said during the call.

"We're well underway, and we're very pleased with our progress, but it's definitely early days," he later added during the question-and-answer portion of the call.

OPTI ended 2009 with financial resources of C$548 million, which consisted of C$358 million of cash and an undrawn C$190 million revolving credit facility.

"We are well positioned from a liquidity perspective. We have sufficient financial resources for 2010 including a credit facility without cash-flow-based maintenance covenants," Beatty said.

As previously reported, during the fourth quarter, OPTI issued $425 million of senior notes, eliminating its debt-to-EBITDA covenant in connection with the transaction.

Beatty said the transaction was completed in order to establish the financial resources and flexibility to support OPTI's strategic-evaluation process.

According to its fourth-quarter earnings release, strategic alternatives may include capital markets opportunities, restructuring its current credit facility, asset divestitures and/or a corporate sale, merger or other business combination.

OPTI's long-term debt at year-end 2009 consisted of $1.75 billion of senior notes, as well as the $425 million of first lien-notes and the C$190 million credit facility.

The company reported a fourth-quarter net loss of C$212 million, compared to a net loss of C$410 million in the same period of 2008. The net loss for the full-year was C$306 million, compared to a net loss of C$477 million in 2008.

OPTI is a Calgary, Alta.-based company focused on developing oil sands projects.

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