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YELLOW MEDIA INC. Message Board

  • mtnlion07 mtnlion07 Oct 1, 2011 8:00 AM Flag

    Estimate of Cash flow and Debt

    TD bank Estimate of Cash flow Debt Estimate
    2012E 264,000 2.072,000
    2013E 354,000 1,717,000
    2014E 348,000 1,370,000
    2015E 337,000 1,032,000

    Assuming lower revenues
    Problems is that they see series A preferred either being refinanced or diluting shareholders.

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    • I agree wholeheartedly with your analysis of preferred A's and likely the same can be said about the B's...both almost definitely will be converted to commons, I would be incredibly shocked if they weren't...some brainiacs are playing the A's and trying to make a buck off the spread between the price of the commons and the potential conversion price of the A's..I believe come conversion date next year this spread will likely not exist and at the end of the day the best case scenario is you receive 2 div payments but you are left with a hugely dilutive common share that you will be looking to sell on the open market along with likely a long line of others.

    • We can be happy that having this company managed by banks will bring much higher quality management than having it managed by deluded fool Tellier for who it is always ''promising and going well''

    • Good points....on preferred A.
      Unless they can buy the series 8 and 9 Medium term notes for 50 cents on the dollar and lower the Total Debt. Then the can either make a partial or full payment to the series A. Dilution is not good for common shares and if you would see what a stock consolidation does. Kiss the common share price away. A 1 for 10 or a 1 for 20 would crush the common stock in shorts and selling pressure. Hope they deal well with the banks, buy Medium term notes 8 and 9 and then do something favorable to the preferred series A, since it is DEBT on the balance sheet. Only other options is rolling this preferred into another instrument which will not go over well with the capital markets. CASH FLOW AND SALES HAS TO BE MAINTAIN WITH YLO FOR ALL OF THIS TO HAPPEN. Keep praying.

    • The banks now control Yellow's cash flow. That's clear.

      As a result, Preferred A will be forced to convert to common, no matter what the CEO says or said.

      The Preferred A is NOT (NOT!) part of the bank's EBITDA to debt covenant!!! Preferred A is not debt in the filings of Yellow, and preferred shares are not debt for purposes of the covenant. The banks would love nothing more than to have all of the other financial obligations become preferred. They could simply demand shutting off the dividends at any time for those without triggering any default condition.

      Preferred A is toast. Thinking about Preferred A at this point is just a distraction from the main show. What people should focus on is the ability to repay debt (medium term notes in particular coming due 2013 and 2014) as well as repaying the credit line coming due Feb 2013.

    • It does have a bit to deal with covenent requirements. First the banks told Ylo that they can not redeem the A preferred until they have dealt with their renewal of credit facility (next fall) and they have to keep within debt - minus cash and preferred / Ebita .....rule that is cannot exceed 3.5 times

    • EBITA/interest should not be less than 3.5x
      Example 690,000 / 130,000 = 5.38 GOOD since NOT LESS than 3.5

      Gross Debt/EBITDA excluding prefs and cash will not exceed 3.5
      for example using TD numbers on 2012 ESTIMATES 690,000 X 3.5 = 2,415,000 on total debts
      excluding prefs and cash.
      IF DEBTS are 2,072,000 ....GOOD since NOT GREATER than 3.5

      Scotia predicts Debt/EBITDA will be 3.36 in 2012 and 3.15 in 2013

    • If the company does not meet new debt covenants set by the banks, the company will face new problems.

      9.7 Consolidated Total Debt to Consolidated EBITDA Ratio
      The Borrower will not permit the Consolidated Total Debt to Consolidated
      EBITDA Ratio for any Test Period beginning with the first Test Period ending after the Closing
      Date to be greater than the ratio of 3.50 to 1.

      9.8 Consolidated EBITDA to Consolidated Interest Expense Ratio
      The Borrower will not permit the Consolidated EBITDA to Consolidated Interest
      Expense Ratio for any Test Period beginning with the first Test Period ending after the Closing
      Date to be less than the ratio of 3.5 to 1.