Kem One - comment

Kem One bondholders have appointed Paul Hasting as legal adviser as the Company struggles with continued weakness in the PVC market. It is reported that Kem One fully drew its RCF in January to bolster its liquidity. This action will result in a covenant waiver request from the RCF banks when the covenant is tested, and breached, at the March quarter end.  

The bonds continue to trade in the high 60’s, with market dynamics painting a negative outlook.  However, the Company has significant operational leverage which could result in a quick turnaround, especially after the recent CAPEX spend at its Fos plant.