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Post by arcticfox on Oct 14, 2012 12:31:32 GMT -5
SBG is asking why Kodak is seeking new financing.... To understand why Kodak is needing more money, we need to look at Kodak's liabilities. As shown in the chart below, the total amount of major liabilities Kodak is trying to deal with currently is about $5 billion. Of that amount $2.3 billion is in the form of debt. The most urgent portion Kodak needs to address if it wishes to emerge from chapter 11 is a reasonable plan for satisfying the secured creditors. In other words the DIP and the 2nd Lien. (see the debt spreadsheet below) Keep in mind these are not the ONLY creditors that needs to be satisfied... these just happens to be of the highest priority. So Kodak has to come up with about $800 million to repay DIP loan and revolver. Then it will have to either repay or come up with some scheme to deal with the $750 mil in 2nd lien debts. Keep in mind that all the original maturity date for the debt are now null and void due to bankruptcy. Now let's examine how much cash Kodak has on hand to deal with these liabilities. Below is a chart that tracks Kodak's cash holding over the past few quarters. It's a compilation of data Kodak provided in SEC filings as well as the monthly MORs. Figures in blue are rough estimations base on recent cash burn rate. What we can see from this chart is that by the end of this month Kodak will have around $977 million in cash. Of that amount, the US portion is projected to be only about $206 million. As we all know, the last time Kodak's US cash holding fell below $200 million, it filed for chapter 11 bankruptcy. So most likely Kodak would have attempted to repatriate some cash from foreign subsidiaries during Sept and Oct to more comfortable levels. Now the question is how much of that ~$977 mil cash is really available to deal with just the DIP? We aren't even going to talk about the 2nd lien, the unsecured debt, or all the unsecured claim. We are only going to focus on the DIP. The important thing to realize is that Kodak US and its foreign subsidiaries cannot continue to operate if it drains the bank accounts dry. It needs to keep a minimum amount in those accounts to support operation. This was alluded to in CFO McCorvey's comments shortly after Chapter 11 filing. She explained that of $691 million cash Kodak has outside of US at the time of bankruptcy filing, $351 million scattered in many countries cannot be repatriated because they are needed to support local operation. A portion of the remaining $340 in china is free and available but has some tax and regulatory hurdles to overcome before it can be repatriated. So let's take a look at how much cash Kodak should have by the end of this month and subtract minimum reserve needed to support US and foreign operation. What we will have is then the "liquid portion" of Kodak's cash. The amount Kodak can use to repay the DIP without significantly impacting US and foreign subsidiary operations. As shown by the chart above, that amount is approximately $477 million. And that is assuming Kodak is able to repatriate about $305 million from China, which may be too optimistic. Given the fact that the DIP loan and revolver by themselves need about $800 million, it's pretty obvious that the $477 million or so of liquidity simply isn't sufficient for repayment. Therefore base on this analysis it's easy to see why Perez and Kodak are desperately seeking additional cash. Clearly Perez and Kodak were hoping that the IP sale was going to provide some of that liquidity. However that plan was dashed when the IP auction failed. This is why Kodak and Perez are seeking additional financing. Of course, idea of attempting to get additional financing at this stage should raise eyebrows. After all, Kodak has already resorted to DIP loan which is generally considered the last option. At this stage there basically nothing left to be used as collaterals for new financing. This is why Perez and Kodak are trying to create something out of nothing by sell this idea of new equity and using that as a form of payment/collateral. Hope that makes sense.
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Post by micgrow on Oct 14, 2012 12:42:51 GMT -5
The big question is, why would a creditor lend more money to a "worthless" cause? Collateral is always underestimated, so Kodak would have to prove solvency for debts before anyone would think of loaning more cash.
It just won't happen unless there is a bun in the oven. These creditors have information we do not, and the fact they are entertaining offers is why the market moved the way it did Friday. I understand you come from the school of Kodak having a failed IP sale/little valued asserts. I understand this has been the reason why you predict commons cancellation. But what when we have companies lending MORE money to Kodak, it paints a different picture of it finances. While I will not pretend to know the outcome, I CAN tell you loans are not made on fairy tails and ghost promises. There must be substance to their collateral. As the priority list grows longer, the IP sale/asset sales must be LARGER to satisfy the debt.
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Post by supor450 on Oct 14, 2012 12:44:08 GMT -5
Your numbers are correct, but your basic methodology for analysis is faulty.
e.g., what is impact on debt when business units are sold?
There are other procedural errors.
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Post by Admin on Oct 14, 2012 12:45:33 GMT -5
I knew you working on something big there Arctic, graphics and all, lol!
All this means nothing until we see the results of the 3 divisions and the Patent Sale.
We need to see some money come in, that is the bottom line.
NOLs we all know they dont want to lose.
SBG
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Post by julgob on Oct 14, 2012 12:52:26 GMT -5
Artic is miserable poor him
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Post by arcticfox on Oct 14, 2012 12:54:36 GMT -5
The big question is, why would a creditor lend more money to a "worthless" cause? Collateral is always underestimated, so Kodak would have to prove solvency for debts before anyone would think of loaning more cash. It just won't happen unless there is a bun in the oven. These creditors have information we do not, and the fact they are entertaining offers is why the market moved the way it did Friday. I understand you come from the school of Kodak having a failed IP sale/little valued asserts. I understand this has been the reason why you predict commons cancellation. But what when we have companies lending MORE money to Kodak, it paints a different picture of it finances. While I will not pretend to know the outcome, I CAN tell you loans are not made on fairy tails and ghost promises. There must be substance to their collateral. As the priority list grows longer, the IP sale/asset sales must be LARGER to satisfy the debt. To answer your question, I don't think the banks are likely to give Kodak more cash in the form of a loan. Kodak wants it and is asking for it. But that doesn't mean Kodak is going to get it. The more likely scenario is that Kodak will end up having some of the second lien debt wiped out in exchange for the new equity offering. Note, whether this transaction is a pure debt to equity conversion or debt plus cash to equity conversion.... it is not a loan. It is trading one thing for another.
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Post by arcticfox on Oct 14, 2012 12:56:53 GMT -5
Your numbers are correct, but your basic methodology for analysis is faulty. e.g., what is impact on debt when business units are sold? There are other procedural errors. What business units are you referring to? What is the sale price? What is the EBITDA? What is the timeframe you expect these deals to close? You know when Kodak is suppose to have a POR all laid out?
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Post by cswift71 on Oct 14, 2012 12:56:55 GMT -5
Great presentation Foxy but all the numbers change with negotiation and asset sales. Not to mention savings from workforce reductions and other cost cutting moves. The financial ball is starting to move in the right direction. Only time will tell though.
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Post by arcticfox on Oct 14, 2012 13:03:13 GMT -5
I knew you working on something big there Arctic, graphics and all, lol! All this means nothing until we see the results of the 3 divisions and the Patent Sale. We need to see some money come in, that is the bottom line. NOLs we all know they dont want to lose. SBG The whole NOL issue is a interesting subject. The topic has been discussed in detail on yahoo boards on several occasions. The first time was when the poison pill was instituted. Then I talked about it on several occasion when refuting claims of supposed buyout etc. I also had some heated discussion with Gibson on what NOL is and what it is not. I would love to discuss the subject in detail to make people understand Kodak's NOL issue but that would take over an hour to formulate something that is easy to understand. I just got back to the states 2 days ago. Got errands to run and hot date tonight. So that will have to wait. There should be some solid information on NOL back on yahoo board that may be relevant to recent discussion.
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Post by arcticfox on Oct 14, 2012 13:09:00 GMT -5
Great presentation Foxy but all the numbers change with negotiation and asset sales. Not to mention savings from workforce reductions and other cost cutting moves. The financial ball is starting to move in the right direction. Only time will tell though. Negotiations won't change the amount of the DIP debt. And the harsh reality is asset sale is going to take time and the outcome is uncertain. If you are Antonio Perez you will be pissing in your pants and worried about cash. The DIP covenant specifically require that the POR must include a repayment plan for the DIP. Telling the DIP that "we might sell this .. and we might sell that.. and then we'll pay you back".. doesn't constitute a repayment plan. The asset and IP sale plans will continue. The hope is that they will at least find some success. However, the outcome is uncertain and Perez cannot count on them. This is why Perez is seeking other options.
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Post by joefarina on Oct 14, 2012 13:25:46 GMT -5
arctic first of all let me give my deepest sympathies to your "HOT DATE" tonite. he will surely be disappointed again!!!!
arctic, secondly your projections as usual mean ZERO!!!! I know when kodak hits you will be missing in action... gonna miss ya bro!!
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Post by Admin on Oct 14, 2012 13:26:00 GMT -5
LOL
AP is not pissing his pants.
He has 1.1 billion in cash worldwide.
Costs are dropping all over the place.
There will be an offer for the 3 divisions in place before the end of the year, plus the patent sale.
All will be okay.
refinance the debt, with bonds, or convertible bonds.
Give a small piece of equity at a certain price can only be 5% holder per the docs from bk25.
SBG
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bk25
Junior Member
Posts: 112
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Post by bk25 on Oct 14, 2012 13:30:56 GMT -5
Pension liability is not debt and there cannot be any claim on Kodak assets or cash flow, except for annual contributions, which Kodak has already paid in advance for the next three years.
Kodak does not have to pay back the DIP loan until July, 2103. They don't need any urgent financing for debt payment.
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Post by arcticfox on Oct 14, 2012 13:44:17 GMT -5
Pension liability is not debt and there cannot be any claim on Kodak assets or cash flow, except for annual contributions, which Kodak has already paid in advance for the next three years. Kodak does not have to pay back the DIP loan until July, 2103. They don't need any urgent financing for debt payment. The term of the DIP is maximum of 18 months so the final due date is July 2013. However the draft of POR and disclosure statements that specify the repayment is due in Jan with the actual filing due in Feb 2013. "Draft of Plan and Disclosure Statement: On or prior to January 15, 2013, deliver to the Agent drafts of an Acceptable Reorganization Plan and a disclosure statement with respect thereto. Filing of Plan and Disclosure Statement: On or prior to February 15, 2013, file with the Bankruptcy Court an Acceptable Reorganization Plan and a disclosure statement with respect thereto, and at all times thereafter diligently pursue the receipt of orders of the Bankruptcy Court approving such disclosure statement and confirming such Acceptable Reorganization Plan."
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Post by arcticfox on Oct 14, 2012 13:47:55 GMT -5
Pension liability is not debt and there cannot be any claim on Kodak assets or cash flow, except for annual contributions, which Kodak has already paid in advance for the next three years. Kodak does not have to pay back the DIP loan until July, 2103. They don't need any urgent financing for debt payment. Pension is one of the biggest unsecured liability currently. Why do you think they sit on the Unsecured Creditor Committee? OPEB was merely a liability on the balance sheet too and now they have $635 million claim that is pari passu with the rest of the unsecured creditors. Who are you getting your advice from? Kenny Pro?
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Post by joefarina on Oct 14, 2012 13:50:25 GMT -5
arctic, when will you stop wanting to be like pro? ?
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Post by Admin on Oct 14, 2012 13:58:55 GMT -5
I also forgot to mention that Kodak is NOT going to wipe the common and issue ALL new shares, because what, some fund lent them 600 Million?
Give me a break!
In proportion of total assets of the company, 600 Million is fractional.
So don't forget that!
SBG
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Post by updated on Oct 14, 2012 14:05:49 GMT -5
SBG, I think Arctic is using your board to attack a real person...What if PRO decided to sue you because you in fact did not do anything about it??
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Post by micgrow on Oct 14, 2012 14:09:18 GMT -5
SBG, I think Arctic is using your board to attack a real person...What if PRO decided to sue you because you in fact did not do anything about it?? 7. ASSUMPTION OF RISK; RELEASE YOU KNOWINGLY AND FREELY ASSUME ALL RISK WHEN USING THE WEBSITE AND SERVICES. YOU, ON BEHALF OF YOURSELF, YOUR PERSONAL REPRESENTATIVES AND YOUR HEIRS, HEREBY VOLUNTARILY AGREE TO RELEASE, WAIVE, DISCHARGE, HOLD HARMLESS, DEFEND AND INDEMNIFY PROBOARDS AND ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AFFILIATES, REPRESENTATIVES, SUBLICENSEES, SUCCESSORS, AND ASSIGNS (COLLECTIVELY, THE "PROBOARDS PARTIES") FROM ANY AND ALL CLAIMS, ACTIONS OR LOSSES FOR BODILY INJURY, PROPERTY DAMAGE, WRONGFUL DEATH, EMOTIONAL DISTRESS, LOSS OF PRIVACY OR OTHER DAMAGES OR HARM, WHETHER TO YOU OR TO THIRD PARTIES, WHICH MAY RESULT FROM YOUR USE OF THE WEBSITE AND SERVICES.
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Post by Admin on Oct 14, 2012 14:11:09 GMT -5
Update what are you talking about?
Pro is free to come here and say what he wants, defend his name, etc...
Why does that have anything to do with me?
I am not going to ban Arctic because you don't like what he says.
Enough of this nonsense.
SBG
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Post by joefarina on Oct 14, 2012 14:17:27 GMT -5
sbg.....updated is not wrong.....arctic is very jealous of pro and attacks him constantly....not your fault ......
maybe pro is artics hot date tonite
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Post by Admin on Oct 14, 2012 14:19:39 GMT -5
Joe I told you time and time again, to get Pro back here to defend his good name against arctic and kid.
Did I, or did I not call multiple times about this, and email you about this, and also PM you about this multiple times.
Let Updated know this is not bullshit.
SBG
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bk25
Junior Member
Posts: 112
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Post by bk25 on Oct 14, 2012 14:20:17 GMT -5
Pension liability is a long-term liability but not debt. Pension fund trustees are not creditors. Pensioners have their own pension fund and that has nothing to do with Kodak's asset base.
Kodak reduced OPEB liability to improve the future cash flow and and solve the solvency problem.
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Post by tmarf on Oct 14, 2012 14:21:18 GMT -5
Not SBG's problem either.....fartick has an unhealthy obsession with Pro yes, but what does any of this have to do with SBG?
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Post by updated on Oct 14, 2012 14:21:30 GMT -5
SBG - did you read the rules when you signed up with boards.net?
You are the owner of ths message board and you said that you understand the policies!!! didn't you?
That makes you?
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Post by joefarina on Oct 14, 2012 14:23:52 GMT -5
update ...sbg wants pro back and i have tried and pro gives me his awful memories of posting to a bunch of myopic morons and impatient peeps.....he will not return....not sbgs fault..
but arctic thinks he is all that and a bag of shit.....he just makes all buy more stock....arctic will be gone very soon....he just is outclassed by pro!! buying more 2 moro
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Post by micgrow on Oct 14, 2012 14:24:20 GMT -5
Updated,
This kind of logic is what makes people sue McDonald's for hot coffee. I really hope you are smart enough to understand SBG is not responsible for users actions. Not only do we all agree to a terms of service release by signing up, we are all mature enough to deal with personal attacks. There is a no tolerance policy for personal attacks and all of the moderators attempt to enforce it when possible.
This has nothing to do with siding with someone, it has to do with appropriateness and context in which the language is presented.
****PLEASE start a new topic in the LOUNGE or this topic will be locked or moved regarding this personal agenda. The OP has good information in it. Please do not force it to be closed.
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Post by joefarina on Oct 14, 2012 14:26:44 GMT -5
hey mic.....am i allowed to call arctic a MORON OR A FAGGY FUCK OR DR.IDONTKNOWSHIT?
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Post by micgrow on Oct 14, 2012 14:28:27 GMT -5
hey mic.....am i allowed to call arctic a MORON OR A FAGGY FUCK OR DR.IDONTKNOWSHIT? Yes you are, in the Fight section. All I am trying to do is keep useful information less cluttered and easily accessible. I know Joe understands my position in all this, I hope the rest of you do too.
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Post by tmarf on Oct 14, 2012 14:29:04 GMT -5
Behave potty mouth.....
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