Newalta Corporation

Newalta Corporation

April 22, 2009 16:30 ET

Newalta Provides Update on Initiatives to Improve Financial Flexibility

CALGARY, ALBERTA--(Marketwire – April 22, 2009) - Newalta Inc. ("Newalta") (TSX:NAL) today provided an update on actions taken to improve overall financial flexibility, strengthen the balance sheet and reduce costs.

Newalta has amended the terms of its Credit Facility with its Canadian lending syndicate. The primary change is an increase of the funded debt to EBITDA covenant from 3:00:1 to 3:50:1 for the remainder of 2009. Other amendments will provide greater flexibility to manage working capital, issue performance bonds, and absorb restructuring costs. At the election of Newalta, the principal amount of the Credit Facility was reduced from $425 million to $375 million, leaving unused capacity of approximately $65 million. The maturity date remains October 12, 2010.

Management has restricted capital expenditures for 2009 to $40 million, comprised of $25 million for growth capital and $15 million for maintenance capital. Of this amount, $15 million of growth capital will be reserved to support firm contracts, as negotiated, relating to Onsite and Heavy Oil/SAGD projects in the second half of the year. This compares to an initial 2009 capital budget of $75 million for growth capital and $28 million for maintenance capital, announced in late 2008.

In 2009, management realigned the business with market conditions and, as a result, 250 positions have been eliminated. As well, effective April 1, Newalta suspended its matching contributions to the Employee Profit Sharing Plan. These actions are in addition to salary and hiring freezes and tight controls on discretionary expenditures undertaken in late 2008.

"The amendments to our Credit Facility provide additional flexibility to manage our business during these difficult market conditions," said Mike Borys, Senior Vice President, Finance and Chief Financial Officer. "The additional measures we have taken to reduce our costs and funded senior debt will strengthen our balance sheet and better position us to capitalize on opportunities as the economy recovers."

Newalta Inc. is Canada's largest industrial waste management and environmental services provider and focuses on maximizing the value inherent in industrial waste through the recovery of saleable products and recycling. It also provides environmentally sound disposal of solid, non-hazardous industrial waste. With talented people and a national network of facilities, Newalta serves customers in the automotive, forestry, lead, manufacturing, mining, oil and gas, petrochemical, pulp and paper, refining, steel and transportation service industries. Providing solid investor returns, exceptional customer service, safe operations and environmental stewardship has enabled Newalta to expand into new service sectors and geographic markets. Newalta trades on the TSX as NAL. For more information, visit

This news release contains statements that may constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, among others, statements regarding funded debt levels, capital expenditures, savings from cost reduction initiatives and other expectations, beliefs, goals, objectives, information and statements about possible future events. Readers are cautioned not to place undue reliance on such forward-looking information. Forward-looking information is based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Newalta and described in the forward-looking information contained in this news release. Among the various factors that could cause results to vary materially from those indicated in the forward-looking information include, but are not limited to, variations in operating results, successful implementation of growth opportunities, the aggregate funded debt levels of Newalta, actual savings on cost reduction initiatives, industry conditions, fluctuations in commodity prices, the availability of financing alternatives, debt service and future capital needs. Readers should also be aware that the forward-looking information is also affected by the risk factors described in Newalta's Annual Information Form and those set forth from time to time in Newalta's continuous disclosure filings with Canadian securities regulatory authorities, which are available through Newalta's website at and on the SEDAR website at No assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur or, if any of them do so, what benefits Newalta will derive therefrom.

Contact Information

  • Anne M. MacMicken
    Executive Director, Investor Relations
    Phone: (403) 806-7019