UNIS Fixed Loaned Amount Finance

The type of financial arrangement with Orbimed is no longer of use to UNIS, although at the time was probably appropriate, because of our then numbers contracts signed and cash flow.
It has already outgrown itself, as can be seen by the need to have a recent cash raise, causing dilution and share price weakness.
UNIS, now needs a Line of Credit finance arrangement with perhaps its biggest shareholders.
I have written to the Board of UNIS and in particular the Chairman and CEO Mr Alan Shortall, and quite rightly, I have received no response, nor do I expect one.
I have previously outlined the saga of Dunlop Pacific, at the time a premier Aussie Spice company, that went bust in US, and management bought out that company, that they could not manage for their Aussie owners, and today in the newspapers it is detailed how management of Toll, at the time, bought out Toll, and now it appears that current management have been able to sell that company. The article details how part of the original management sold their stake for $340 million. ( I do not contend or insinuate any improper conduct or wrongdoing in either of these cases, other than to point out that any management may have different direction and outcome, for the company than that of the shareholders)
Let me say publically, that I am a big time fan of UNIS Board and Chairman and CEO, however it is our duty as shareholders to express views to the Board when necessary, and we can be wrong in our thinking because we and even some members of the Board are not privvy to all discussions and directions.
We have witnessed some very painful Conference Calls, when even questions of 'What plant and capacity we have installed?', meets with a painfull, 'ring around the circus' answers, and no matter what question the analyst tried to find out, got confused.
The latest LeeRink CC was a breath of fresh air, and now we know a little.
Two very high profile appointees have joined UNIS, David Hastings as CFO and Kevin Sellers as Senior VP of Marketing and Communications, and I welcome them both, as their expertise is needed for the shareholders benefit.
Note, that I have purposely, said the shareholders benefit.
As previously stated the OriMed finance was inadequate, and was probably the best we could do at the time, however, not only was inadequate at the time, but has been demonstrated inadequate by the recent cash raising and the lack of finance, hangs over the company like a hovering guillotine, until a proper present and futuristic financial structure is established, and that being an Virtual Unlimited Line of Credit.
Unlimited Line of Credit.
It would have 3 aims
1 To ensure that UNIS has a virtual unlimited financials stream, for whatever purpose, financed by each supply contract entered into.
2 To dramatically increase the shareprice overnight.
3 To enable long term, loyal shareholders to benefit from dividend income ASAP.
I envisage this type of financing a stategic move, that would take advantage of the annuity type income stream generated by the UNIS product supply contracts, being in the order of 10-20 years. Many of these contracts have minimum volumes but no maximum volumes and so income can increase over the period, buy not decrease.
By engaging-, perhaps our largest financial institution shareholders in this arrangement would have certain aims and outcomes.
Aim
To allow an initial period of grace, that would provide a borrowing limit to maybe be higher that our repayment capacity. (although a $100 million dollar loan, need only repay $7 million interest annually as part of a LOC)
1 Immediately declare a dividend of $1 per full UNIS share (Cost $122 million per year)
2 After Supply Contacts are signed, the Upper Loan amount, would increase according to the long term payment capacity of the Supply Contracts
This would ensure all future funding needs were met automatically, and that a minimum dividend was paid.
All funding requirements for UNIS would come from the LOC, including, expenses, plant, wages, and any costs of the company and these would be repaid over the full term of the LOC facility. This has a threefold purpose.
1 That all UNIS funding needs are met
2 That all future UNIS shareholders repay the early establishing costs of UNIS, equally as the forebearing shareholders.
3 To allow UNIS Finacial Partner, to gain a steady predictable stream of income over the full loan period.
Outcomes
1 The Financial Partner could be a current shareholder and receive an immediate cash dividend and would benefit from a long term stream of constitent loan repayments
2 Existing and Long Term shareholders would gain a dividend immediately, at a cost that would not burden the company as UNIS has little or no selling costs and this would be an offsett
3 UNIS shareprice would be propelled upward and if a 2% dividend of $1 was used the shareprice should be around $50, but with 'shorts' outstanding should go much higher.
Once the principle of using the LOC for all capital needs then UNIS could announce a dividend policy and that being.
The annual dividend would be Income of all types minus Tax minus LOC repaymentsminus an ammount determined by the board.
As supply contracts are signed and production ramps up for each it is very apparent that layers of income (as described by the CEO) would stream into the LOC account and so there would be layers of cash available for dividends, ever increasing and so the shareprice would ever increase.
One would drive the other.
An uninteruptable predictable stream of income, layered, apon layer, apon, layer, on top of each other for dividend distrbution, amongst UNIS shareholders.
Even at this early stage of supply contract signing, we have 7 layers of income and some of those layers are extremely thick, and 20 or more being developed.
I feel that it is in every shareholders personal best interest, to write to the board of UNIS and request such financial arrangement be put into effect ASAP.
[email protected]
This request to the Board would mean that they were made accutely aware of shareholders concern about current funding methods and ask that a Line of Credit facility be established.
This will ensure that UNIS shareprice will not flounder due to finance restrictions and make a 'take over' or 'management buy out', caused or exasperated by those finance restrictions, apparent, as the Board has been advised and therefore provide a foundation for a 'Class Action Lawsuit" if ever needed.