Cubic Corp to Defer Debt Interest Payment Amid Liquidity Management Efforts
Cubic Corp, supported by Elliott Investment Management and Veritas Capital, will defer an interest payment on its $2.5 billion debt as part of its liquidity management strategy, following a recent balance sheet restructuring. Despite improvements noted by S&P Global Ratings, the company faces ongoing operational challenges, including setbacks in its transportation division and concerns over credit quality, as reflected in the low trading value of some loans. Cubic has secured defense contracts with the US Air Force and Canada's Department of National Defence, but lost a significant fare system management contract in London.
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Cubic Corp, backed by Elliott Investment Management and Veritas Capital, plans to defer an interest payment on its debt to manage liquidity. This decision comes seven months after a balance sheet restructuring that reduced debt and included a $170 million equity injection.
Cubic's current debt stands at approximately $2.5 billion, with some loans quoted at about 38 cents on the dollar, indicating investor concerns about credit quality. Previously, S&P Global Ratings noted improvements in Cubic's capital structure post-restructuring, despite ongoing operational challenges from supply chain issues and contract delays. While Cubic has secured defense contracts with the US Air Force and Canada's Department of National Defence, it faced setbacks in its transportation division, losing a major contract to Indra Sistemas for the management of fare systems in London.
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