Can someone explain the math behind your assumptions of when debt os repaid?
Currently there is 180M in the bank. As per the last quarter there was +11 or 12M cashflow. There were some Q1 one-offs in there, but even if you round it up to 15M per quarter it is only 60M per year based on current traffic volumes and expenses.
Now, if as the company has stated they are going to do 1c divs each 6 months, there are roughly 4B shares on issue, then it will cost 40M per 6 months, which means that in the short term, the company will have to dip into cash to fund the divs while the ramp up (hopefully) continues. CPI increases will also help.
While dipping into cash, I'm not sure how the 810M will materialise to pay off the second tranch in the next two years. Either more shares issued resulting in more dilution or a refinance.
I'd love to be corrected, but as far as I can tell, that debt is here to stay for a while as the company works on controlling expenses and waiting for the increased traffic volumes
Based on the increases to date, the company should be in a position next year of being able to fund the 1c divs without going into cash, but the calls for higher dividends in the other thread will only run down the cash faster and remove any contingency that the cash in bank provides.
DYOR
Tom
CEU Price at posting:
44.5¢ Sentiment: Hold Disclosure: Held
