Dallas, Texas 10/14/2013 (Financialstrend) – Nuverra Environmental Solutions Inc (NYSE:NES) is a waste management firm which has operations spread across United States. In the recent past the stock of the company both have been under pressure. This is due to perceived liquidity fears as cash flow from operations has slowed down significantly over the past few quarters. In a clear sign that its debtors still having confidence in the company management, Nuverra Environmenal Solutions filled mandatory updates on September 27 to SEC. The filings included details of the reworked terms on its secured line credit from the banking consortium led by Wells Fargo Bank. As per the amended clauses, Nuverra gets a deadline extension to surrender the titles of identified real estate which has been pledged as collateral for the line of credit. The lenders have also extracted a reduction in cap on further borrowings by lowering the debt to market cap ration from earlier agreed percentages to 1 till 2014.
The company also has a proverbial domical sword hanging on it in the form of a potential class action suit that some of its disgruntled investors have initiated. The law firm representing the investors are alleging that the management intentionally misled and did not disclose the seriousness of the liquidity crunch that firm is going through during August 6 2012 and August 23 2013.
NES has a market cap of $574 million with annual sales over a trailing 12 month period of $531 million. It has recorded a net loss of $29.8 million in the same period. The investors are worked up about the low cash per share ration of $0.04 for the most recent quarter. The stock has shed close to 34% of its market valuation in the previous 90 days and is struggling to stem the erosion in its market value.