RE:RE:RE:RE:RE:RE:RE:Blue sky ahead!Oh, you don't have to explain anything about the debt to me, BBDB859, I have a pretty good handle on the numbers.
At the end of Q1 they had $2.6B including the $600M Alstom shares. That $600M was mostly used to redeem the Euro bonds, and the remainder will be used for the rest of the 2021 bonds. So they have about $2B in cash, ~$400M of which is
short-term restricted cash as collateral for bank guarantees. I believe this is the money that BD mentioned they were trying to free up. If they can free that money up, they have about $500M they can still throw toward debt ($2B-1.5B needed on hand), if not, they have about $100M. So with about $1.2B of debt remaining due by 2023, they will need an additional $700M-$1.1B depending on their success freeing up the $400M. I think they will do a further bond offering, as well as a $500M or so LOC. I do not think they will have any trouble raising this money, but they need to take care of it this year if they are to achieve their stated goal of a 3 year runway.
As for Q1 cash burn, I am not as concerned about that as you are. One factor is that the backlog dropped about $300M, even though book to bill was >1. This is because they need to reshape the backlog, as has been mentioned several times. Customers are waiting over 2 years for their G7500, whereas BBD wants to be able to deliver in 18-24 months. They are already near their max cadence of about 40 deliveries per year, so they will be selling fewer G7500's for a while until the backlog profile is what they want. When the backlog is stabilized, there will be less cash burn. (i.e. deposit money stabilized)
Also, there was a loss of about $76M on the repayment of the LOC, non-recurring cash items including the impact of winding down the reverse factoring programs, payments of residual value guarantee liability and restructuring costs.
BBD gave guidance of FCF usage of better than $500M, and have since reiterated that guidance. I do not expect a lot more cash burn for the remainder of the year.
Jim
BBDB859 wrote: Sorry repost.
You seem to be a very colorful fella.
We both know very well, that they have about $1B to $1.2B more to clear the 3 year runway. It's in your/mine posts below. But that's the 01/2023 bond you're refering to, and that was brought down by $250M already from the first, and second extended buyback offering.
Look.
BT proceeds of $3.6B.
-After repayment of the revolving LOI. They should have had $2.9B left over.
-they paid out close to $2B for the bonds due, from now, till the end of 2023.
-They should now have left about $900M in the bank from BT + $1.8 in reserves = $2.7B
But this is the the killer with Bombardier here.
They only have $2.2B left after Q1 2021, according, to what we're hearing from the media, $2.2 is the number. Why is that? The media is close I think, because the Bombardier Q1 statements show, that they had a cashburn/usage of $400M for Q1.
So. If we we were, at $2.7B cash in hand - $400M cashburn, we probably have close to $2.2B left over. So the media is right.
But.
You & I, talked about this before. They still have to put in a Revolving Line of Credit in place for BA. That LOC hasn't been put in place yet, because they are using their own $2.2B cash to fund these Inventory purchases, and, or whatever Operating Expenses they use the LOC for. So that they can save the interest, from not carrying an LOC right now.
Folow so far?
Next will be the repayment of that Bond you are refering to. The last remaining $1B JBD of 01/2023 #097751BF7.
How do they deal with it?
They can do it in many ways.
They can sit there, and operate like this for a while, even till mid 2022. Or they can put in an LOC in place, today? Remember that, that LOC rate has to be secured, so maybe, they are trying to figure things out right now. The other thing they have to figure out is, how BIG that LOC has to be, with this stand alone BA.. They have to operate BA for a full year to see what size of LOC they need. So they have runway for that LOC.
Now assuming that LOC is put in place for $750M.
As you say they have to have $1.5B on hand, as cash reserves as well.
If they put the LOC in place closer to the due date of the 2023 Bond (Jim's Bond), not to be confused with James Bond of course. Then, they can save 3%-4% interest from now till then.
So my guess is that, that's what we'll see next. An LOC put in place. When? I don't know.
But when the LOC goes in place. Then they'll have another Billion to be able to discharge that $1B Bond, from cash or cash equivelents on hand.
So from above $2.2 (cash on hand) + $750M (LOC) = $2.95B cash on hand.
So they need $1.5B in cash reserves going forward, and to pay off that $1B 2023 Bond (Jim's Bond) with above money of a total of $2.5B.
No need to make another offering from the Junk Bond market. In fact they'll have $1.9B cash on hand, or cash equivalents to carry on. So left over $400M (I hope) from $2.9B - $2.5B used. That's why I said that I'm not worried about the debt till 2024. Even the 2024 is doable with a good RATING by then, and some cash that they have left over in reserves to take care of it.
Now I'm hoping that, you have, a handle on the LTD.
You're a smart guy? Why don't you contribute on the real problem here? The cashburn. I know you only like coloring other peoples posts but, this CASHBURN is a real problem. What do you make of it? Why are they burning cash? That's what sitting on my craw. Because if they keep this cashburn up? They won't have anything left to do anything with past Q4. This problem is Quarter, by Quarter, that we're dealing with.
Cheers
859