Ann: Quarterly Activities Report, page-3

All they have done is switched out their overdraft facility for a term-loan. The overdraft from callable at any time by KCB, whereas the term-loan is payable over time. The risk with the overdraft is that KCD calls IEC on it, they can't pay it and they are forced into default. Its also why you see IEC always maximises the overdraft, rather than putting cash to pay it off, as they would have been afraid that KCB could reduce it on them.

now they have halved the overdradt and converted it into a loan. It is more certainty of funding for IEC and a decent sign by KCB that they their credit teams are ok with IEC from a risk of default perspective.

I am really confused though by two things - anyone thoughts are appreciated here:
- Expenses are extremely high. Nearly twice what was budgeted for. I just don't get it. I mean, i get that this is a cash flow, rather than accounting statement, so is reflecting cash movements rather than accounting PnL's, but still. (ie, if you look at last quarter, they showed revenues of US7.7m in the activity statement bu only A5.5m in cash receipts). I really thought we would see a much lower cost of production number....
- Expected revenues for next quarter is low. I find it odd that they are predicting revenues, having next done that before. The optimist in me says these are known revenues which have been earned in the previous quarter which are expected to be paid in the next, but that seems too high. The pessimist in me says this is actually what they are forecasting for cash-inflows, but then that seems too low...

It is still being priced for default, so I continue to hold (and buy). But would love some clarity.