Got a hunch we will be getting quite a good answer to any...

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jimmyp

417 Posts.

09/10/14

19:43

Post #: 14102319
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Originally posted by Timber7 ↑

Hi Writer,

Can you please help me understand something I cant quite reconcile before I reenter - the debt load that UNS now carries (something they didnt have before I first bought) is in my view 'unserviceable'. I estimate that by ECY14 debt will be $60M, full-drawn down on OrbM facility.

The commerical signings that have come and will come in the future WILL be used to fund R&D i.e customisation and various manufacturing programs. This is in-line with the business approach. So deal signed=fund R&D (as opposed to reduce debt). UNS est. that R&D etc to be circa ~30M, and other expense to be roughly comparable to pcp i.e ~28M for admin opex. Are you hoping that the unfront signings 'pay' for the R&D opex and other line items? The $60 OrbM deal seems to have been inked as it was anticipated that the rate of commerical deals would either slow or not satisfy the short-term cash requirements. At its simplest, debt is usually undertaken to bring forward receipts. OrbM have therefore lowered the receipt requirement even though the draw-down has been brought forward. A pessimist might say that the change in financing arrangement is not so much a vote of confidence but a move to secure Unilife. After all the loan is secured so even if UNI go down the loan can be distinguished, rather than 'pay-down' from UNI sales.

The other reason why the debt looks unserviceable is that there are no near term earnings. I tried to do a search, and generally do some research on any DMF Type III lodgements to support the use of UNI products. Alas, none. Not a single partner seems to have filed? Are you anticipating that they WILL file after the customisation is done, and if so when is that?

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Got a hunch we will be getting quite a good answer to any financial concerns before Christmas

UNS Price at posting: 59.0¢ Sentiment: Hold Disclosure: Held
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Got a hunch we will be getting quite a good answer to any...

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