RE:RE:From what I remember in math class… $350M plus $145M = $495M$280M is annual interest payments and not for 6 months as you suggest. There is no finder's fee payable to anyone for those four drugs. That is another fabrication made up by the shorts. Also, with the current exchange rate, Cinven payments have now decreased to USD$177.
You also conveniently omitting to factor in EBITDA over future periods. The company started Q3 with USD$145M.
Again, let's go through the numbers for everyone's benefit based on the company's revised guidance:
End of 2016 Cash Balance (all in USD):
Cash balalance at end of Q2: $145M
EBITDA for 6 months: $240M
Net Note Proceeds: $325 (conservative approximate number netting out commissions and fees)
Interest on Existing Debt: USD$120M
Principal on Existing Debt: USD$20M (conservative approximation, likely less)
Interest on new $350M Notes: USD $7M
First Cinven Instalment: $88
145 +240 + 325 -120 - 20- 7 -88=$475M
Cash Balance at end of 2017 Assuming No Growth:
Cash balalance at beginning of 2017: $475M
EBITDA for 2017: $480M
Interest on existing debt: $240M
Principal on Existing Debt: $40M (conservative approximation. likely less)
Interest on new $350M Notes: $31.5M
Principal on New notes: $10M (not sure about this number, but being conservative)
Second Cinven Instalment: $94 (I'm assuming excahnge rate returns to the 1.30 level. Lower if exchange rate stays at current levels or decreases further)
475+480-240-40-31.5-10-94=$539.5M
So in just over twelve months, the company should be able to increase liquidity to $540M without making any new investments or product launches. We all know that the company did not borrow $350M for it to stay idle. That money will be invested to accelerte product launces and to buy additional portfolios of drugs. The ROI on those purchases will be substantially higher than the 9% they are paying on the debt meaning the cash balance at the end of 2017 should be even higher than the number I estimated above.
It is very easy to point to numbers in isolation to support the short thesis. A holistic view of the financials shows that the company has ample time and room to adjust its business plan and focus on acquisitions and product launches that are not dependent on significant price increases. Given the significant depreciation of healthcare assets accross the world, achieving a 30% ROI on such investments is not reasonable.
This company is on the verge of turning things around in a very dramatic fashion. I challenge you and the rest of your shorty friends to stay short over the next few months
FullReversal wrote: You should take a basic financing class. The $350 sells the company to who Goldman decides the place the First Lien Notes with.
The $495M will be chewed up in no time: $280M in debt servicing+$200M in Cinven earnouts + $72M possibly dues to that UK 4 drug finder's fee the company has yet to disclose on.
That's all within 6 months! And you admit the company will only "survive a while longer"? Why on earth would you hold this long???