I think it's more like this...
SHAREHOLDER COMMENT SUBMITTED VIA EMAIL
Hi James,
I think the problem with this scenario is that you're treating $85M as if it's a gift... not a loan. I'd love to think TPAC could make enough in interest to cover its payments back to the Ex-Im bank, but that seems unlikely. I assume those payment s are going to be large, and regular. Would love to hear more.
Thanks.
IR MANAGER RESPONSE
Greetings Shareholder
The financial group at TPAC are not just throwing out numbers. It was stated in the conference call and business timeline that all financial figures are based off the BTL contract. EX-IM is an opportunity to raise TPAC in an instant.
1) TPAC’s net 2017 earnings is more than enough to pay the EX-IM loan payments. The BTL contract net earnings would cover the payments, while still offering retained earnings.
2) Now being a service provider, more than a manufacturer, TPACs operating expense has been drastically lowered.
3) If TPAC takes the EX-IM bank loan, it is ear marked as set-aside for the MRVB expansion -- payments could even start from the EX-IM bank currency... if it had to but it doesn’t.
4) Payments start 6 months after the loan has been awarded.
5) Payments are made quarterly -- $780K USD
6) Enough time for the MRVB to begin expansion -- conservative 10 percent per year adding another $8.5M USD yearly
7) Remember TPAC has not entered any other source of revenue generation into the figures.
8) TPAC is well within the target of paying off the EX-IM bank loan -- if it chooses to use it.
However $85M USD with a .01 interest rate is $850K USD -- MRVB estimated expansion $706K USD/month -- BTL estimated net $333K USD/month. BTL can make up for the quarterly payment. (Remember now, there is still the $85M USD as back up, even if something went wrong. The OS is under $10M) There is no other use for the revenue but to add to the company bottom line.
I really think the financial group has a plan for making TPAC regenerative. They have cleared the way for this type of stability and regenerative action to take place. Remember, the loan was originally to acquire stake in BTL and one other facility. TPAC has done this through Service Level Agreements without spending a dime -- they now pay TPAC.
The USA FR says take it and let it sit as cash-on-hand. In the MRVB, it becomes working capital -- enough to recall the entire TPAC OS 10 times -- raising TPACs worth more than 5 times its current value.
So no --they are not treating this as a gift. This is working capital…this is revenue….and they plan to make it regenerative. If TPAC 36 months from now has a problem with the BTL contract, it would still have earned more than $2M USD in interest payments alone --- Stability and Security….Name of the Game.
--James
IR Manager
AI
