not certain where you get the $80m from. Also, not drawing on the $50m facility to help Coe out I dont quite understand, so I would really appreciate an explanation on this.
The $90 will be paid out over the next 18 months from the revenue on contracts. If you take a look at the presentation it explains how Isoft basically draw on funds when contracts are signed and simply repay them as the contracts are filled. That is where the $90m debt facility comes from. IBA have stated that the contracts are being completed mostly over the next 18 months with the funds going back to reduce the facility as agreed.
So really, the debt position looks fine. Add the additional $70m pa from April 08, and you can understand why they do not need any further funds. And, as they have stated, they will generate a net profit (even after tax and amortisation and costs associated with the integration) for FY08.
I really do think this is one company to watch. As I said, only a handful of stocks are trading higher than where they were in November, with many 'blue-chip' companies losing 40-50% of their value. Fundamentals are not being considered in this market. Driven by fear. I've got to say, this will eventually blow over, as to how long, I'm guessing second half of the year. To be able to pick up the likes of LEI, WOR, etc off some 40% to me seems incredible when they are essentially price makers just goes to show how irrational this market is. But surely value is now there and it will come out in the medium-long term. As someone once said, the easiest time to invest is when the market drops 20%-30%. So, technically, it is very easy LOL!
IBA Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
