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Zane L

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27/02/21

12:20

Post #: 51384900
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Originally posted by CaptainSteve: ↑

I would only be guessing but nothing I have seen indicates that Jatcorp is not able to manage debt. Cash flow positive all last year and the two 4c's this year. The loans were not to just keep going as Jatcorp has been operationally profitable for years. The loans are a result of mainly capital purchases such as the upgrade of ANMA and possibly to assist in the develop all the new Jatcorp head company products. There have been many in the last 12 months. They have only just started selling some of them.

View attachment 2959748

The provider of funds is Topwei Two Pty Ltd. They are also the owners of the Auveno brand from New Zealand. ANMA manufactures some Auveno products and I believe Jatorp has some kind of distribution agreement to sell some of their products into china. Topwei Two Pty Ltd would also owe Jatcorp funds from what I speculate. Topwei Two Pty Ltd also supply Jatcorp with very short term loans interest free from the last 4c report. So the so called short term high interest is countered with this fact.

"3. $770k short term interest free unsecured loan was borrowed from Topwei Two Pty Ltd in
December 2020 to fund the purchase of commodities for a trading transaction with Beijing
Grain. The loan is expected to be repaid in February 2021 on receipt of proceeds of sale on
presentation of Beijing Grain letter of credit."

One of the $5mil can be converted to shares in the agreement. These loans are being managed well IMO but we would all like to see them rolled into lower interest loans. Its not like getting a loan on real-estate equity. Non secured business loans are always high interest. I note the second loan is lower interest as it is secured.

In summary IMO they are managing it well but even the half year report indicated this

"The Board will continue to improve the Group's capital structure. JAT can be expected to achieve a net profit after tax position once the finance charges are reduced.”

They are working on it.

GLTAH DYOR

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Thanks for answering my question with such great detail. It alleviates my only concern with Jat. Looks like others were interested in your response too. Thanks again

JAT Price at posting: 2.4¢ Sentiment: Buy Disclosure: Held
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