MasTec has requested amendments to its $125 million credit facility with Fleet Securities, now Bank of America, related to violations due to a registered net loss of $39.7 million on revenue of $873.9 million in 2003. "As a result of the 2003 losses, we are in the process of obtaining an amendment to our $125 million credit facility, which we believe will be completed prior to the filing of our 10-K," said Austin Shanfelter, MasTec's president and ceo, on a conference call.
MasTec is in violation of its debt covenants, but has not been declared in default by its bank group, explained Shanfelter. "We are amending our credit facility because technically we wouldn't have been in compliance with the December and March covenants relative to the tangible net worth and fixed charge covenant," said David Sasnett, MasTec's cfo. He said MasTec has a very supportive bank group. A Fleet banker did not return calls.
Total debt for the telecommunications company was $226 million in September 2003. The company has about $30 million available under the facility's revolver and $4.9 million in cash. But Shanfelter underlined, "We believe we can manage to grow our business very well with the current liquidity we have in place."
During a review of the company's annual results, MasTec's management recognized a number of issues that have affected the company's current and prior performance. These include additional reserves for doubtful accounts and inventory, cost overruns on certain projects, valuation reserves for state deferred tax assets, provisions for writing down the company's Brazilian operations and overstatements in a Canadian subsidiary. Some of these issues may require restatements of amounts previously reported.