Callidus Capital suits shine light on world of distressed lending<\/a><\/li>\n<\/ul>\nIn the fourth quarter, Callidus recorded a provision for loan loss of $131.9 million on one specific loan concentrated in the energy sector.<\/p>\n
On a conference call Tuesday morning, executives said confidentiality provisions prohibit them from naming the borrower, but said the borrower has significant commercial interests in a South American country where sanctions imposed by the United States and Canadian governments are prohibiting certain types of business activities. In addition, the South American country has defaulted on sovereign bonds, leading to a ratings downgrade, and the nation\u2019s military appears to have assumed management control of the borrower\u2019s main customer, a state-owned oil and gas company.<\/p>\n
Analysts suggested the country in question is Venezuela, and that the borrower is Oklahoma-based HorizontalWell Drillers.<\/p>\n
Callidus declined to name the party, but said if the borrower\u2019s project is able to proceed and it secures \u201cfollow-on business,\u201d the loan could be repaid and the non-cash provision reversed. However, if the project does not go ahead, the loans \u201cwould be impaired by a further $64 million,\u201d as assessed at Dec., 31, 2017, Callidus said in its annual results.<\/p>\n
On the conference call with analysts, chief executive Newton Glassman said Callidus is continuing to pursue a privatization transaction, which has been in the works for over a year.<\/p>\n
He said \u201cnormal friction\u201d between prospective buyers and the firm, as a seller, is being affected by \u201cnoise\u201d in the market.<\/p>\n
\u201cThe noise in the market in my opinion, likely created in part by short selling, etc., has succeeded in reducing the stock price to a level that we don\u2019t believe reflects the real value of the assets,\u201d Glassman said. \u201cIf I were a buyer, and sometimes I am a buyer of other companies, I would still try and buy it as cheap as possible. My suspicion is they will continue to do so.\u201d<\/p>\n
He said if and when a transaction is tabled that the board \u201cfeels is appropriate,\u201d it will be presented to shareholders.<\/p>\n","protected":false},"excerpt":{"rendered":"
Loan loss could grow to $196 million<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/3411"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=3411"}],"version-history":[{"count":1,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/3411\/revisions"}],"predecessor-version":[{"id":3412,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/3411\/revisions\/3412"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=3411"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=3411"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=3411"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}