Full-year financial results for Caza Oil & Gas (CAZA) show the US-based company reduced gearing in 2014, largely aided by the $10m (£5.9m) share placing announced last July. But look further into the statement and the debt position is far from positive, as the company notes it is "not in compliance with all financial covenants".
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Apollo Investment Corporation, which loaned Caza $45m, has agreed to defer the covenant breach until September, although the note is now booked as a weighty current liability on the oil company's balance sheet. Caza acknowledges that continued breach of these covenants - likely, given a reduction in capital expenditure - could cut off its access to additional funding.