Highwood Asset Management announces full repayment of promissory note
- Highwood Asset Management Ltd. completed the early repayment of a promissory note worth approximately $10.7 million.
- The repayment of the note is expected to reduce interest expenses and is part of a strategic move to prepare for upcoming capital needs.
- The company aims to improve its financial health by managing debts effectively ahead of its 2025 capital program.
In Canada, on November 26, 2024, Highwood Asset Management Ltd. announced the early repayment of a promissory note related to its acquisition of Boulder Energy Ltd. This promissory note, originally issued on August 3, 2023, was to mature on July 1, 2025, requiring equal payments over the repayment period, along with the full outstanding balance due at maturity. By paying off the note sooner than required, Highwood aims to reduce its interest expenses as the note had a higher interest rate compared to its credit facility. The decision to repay the promissory note early was influenced by the company’s assessment of its financial position and cash flow projections. The notes were initially structured with a repayment schedule involving three payments of $3.5 million each, to be made in early 2025 and the remaining balance due at maturity. By addressing the debt early, Highwood aims to bolster its financial stability ahead of anticipated costs associated with its 2025 capital program, which is estimated to incur around $3 million in 2024. Furthermore, the company indicates that this repayment will positively impact its financial health, showcasing efficient management of its financial obligations. The difference in interest rates is significant, with the promissory note carrying a rate of 13% per annum, while the credit facility incurs an interest rate of approximately 8% per annum. This move could signify Highwood’s commitment to optimizing its capital structure as it navigates its operational goals and prepares for its 2025 strategy. Highwood also mentioned that its directors received Deferred Share Units, which are subject to acceptance by the TSXV, moving forward with governance and employee incentive measures. The information shared by Highwood reflects both their adherence to strategic financial management and their forward-looking approach, taking into account a variety of economic factors and potential risks that could impact their operations and future performance.