The amazing sharemarket adventures of Eclipx continued yesterday. After losing more than 60% of their value last week after a weak trading update, the suspension of its dividends and calling off a marriage with rival McMillan Shakespeare, the shares lost another 12% at the start of the week but reversed yesterday to end up 22.8% at 70 cents.
That was after Eclipx released a second market update (in a week) yesterday confirming it is within debt covenant limits and remains supported by its six financiers.
Eclipx has net debt of $284 million against a market value around $208 million, a red alert.
The company says it has received several offers for its Grays and Right2Drive businesses and has officially put them up for sale. Both businesses were highlighted in last week’s update as troubled and cash drains.
The proceeds will be used to pay down that $284 million debt.
It also said is setting up a transformation office to find a promised $20 million of savings and handle the sale of Right2Drive and Grays.
ECX said in yesterday’s update that it “has received approvals to exclude the up to date restructuring and merger costs from the corporate debt leverage ratio calculation.”
“Further, there are no concerns to the warehouse or ABS programs of ECX.”
Eclipx last week canceled its dividend and will test the carrying value of goodwill as part of its half-year accounts. (Its half-year ends 31 March- next Sunday- with results released in May).
Revenue from its fleet and novated business is up slightly in the five months to February, compared to the same period in 2018, adjusted for accounting changes.