Hi BB, The $40m working capital facility was renegotiated to April (P6 of the report). It is showing on the bal sheet as a current liability (quite correctly). If ANZ say "pay", then it takes a big piece of the LL cash (57%).
Cash burn in the 1/2 just gone was about $1.4m/week (P13 $36m/26). Assuming that a lot of the initiatives announced will not bear fruit until the end of qtr1 (due to payout of redundancies, potential penalty clauses due to early termination of contracts, shutdown costs etc etc), then another $18m of cash will be used.
That only leaves $12m of the LL cash left. Not a huge amount.
KZL's 5 year plan is to get economies of scale and come down the C1 cost curve. This requires cash to do it. It must be very frustrating for GD to have to scale back production, when the strategy is to increase production.
IMO, cash flow will be critical for KZL. Again, IMO, once they stem the cash burn, they will need to restore confidence in the company by delivering on their promises.
Thoughts?
HT1
KZL Price at posting:
17.5¢ Sentiment: None Disclosure: Not Held
