Credit FacilityI've plotted the net cash flows until 2016 using information from the Income statement. I've included generous amounts for interest, taxes, tax installments, and dividends to the preferred shareholders as there are none for the common at this time. I've assumed a gross operating profit of $150 per quarter, interest of $30 million, taxes of $30 million, dividends of $8 million. I've also included $30 million per quarter of extra tax installments for 2012.
Based on the numbers I've plotted, I estimate the credit facility can be paid to zero in the 3rd quarter of 2012, 6 months ahead of its expiry date of Feb 2013. Projecting all of the numbers to 2016, the potential shortfall of $20 million may occur in 2014Q2 for the one quarter. Heck, just cut out the coffee fund and they can cover it.
My point is, yes there was cause for concern if there was no intervention but now that the A's are to be converted and the common share dividends suspended for the foreseeable future, it is my opinion YLO will survive even if they have little slippage from the $150 million gross profit.
Got to thank the G&M for the article today... I've added another 1500 pref A & B's today at some fairly low prices.