So.... I think what I am saying is pretty clear cut... But let me try again, again.
We know that theres 9.6 million in deposits recieved by RFT.
Note:
* that money is not rft's until product is delivered, hence why its listed as a liability (as if products not delivered, rft must pay it back -hence my use of the term "loan" before - I will now avoid this term for the purpose of avoiding confusion)
* based on the companies own comments "we are ensuring that the current open orders on this product are being honoured by that customer" we can safely assume some of the deposits stated in the liabilities column are those that came from Tritium (the company now in liquidation)
RFT recieved deposits (as stated in the liabilities section of the report) and begin making product, hence they have a large amount of inventories
We see the inventories appear in the assets column of the report.
Thus, we see deposits in liabilities... and we also see inventories in assets...
So,
1. We know Tritium has likely not taken delivery of around AUD 5 million worth of their order based on the companies comments, thus we can assume at a maximum, 5 million worth of the deposits stated could technically belong to Tritium (as they have not recieved the goods)
Note: it could be far less that 5 million, as its only a deposit, however for understanding maximum possible damage to the company I'm going to pretend that the actual stock was all paid for in advance so the deposit was actually full payment.
AND/OR2. We can assume that 5 million worth of the stock on hand (inventories) that was custom built for Tritium (as per companies reports) is now on hand, not delivered, and potentially unsalable...
Note:
1. Whether or not the customer said "we cant afford it (even after paying for some/all of it), so don't send it" or RFT just didnt send it, is irelevant. The bottom line is Tritium did not take it, thus they possibly have the permittance (depending on what the contract states) to ask for their deposit back. Obviously, liquidators will be handling this.
2. We do not know or can not pretend to know the contractual obligations as we have not seen it however, once again, for the purpose of understanding the maximum possible cost to the company I'm going to pretend that the actual stock was all paid for in advance so the deposit was actually full payment and that all stock ordered is outstanding, meaning the full 5 million is technically repayable and the full 5 million of inventories is possibly un-salable.
Thus, either option 1 or 2 (above) has occured or they have both occured.
So,
RFT is likely to have either:
5 million worth of stock (worst case scenario) they cant move (as its a custom order by Tritium) - if they return the deposit, they keep the stock (of course).
or a 5 million dollar (worst case scenario) deposit paid by Tritium that needs to be refunded (as the goods were never delivered) - if they don't deliver the stock, they must return the deposit (worst case scenarion)
or both... If it's both, this will be 5 million deposit removed from the liabilities section that will never transfer over to a cash asset as its actually repayed back to Tritium, PLUS they have 5 million dollars of stock that they can't move without reconfiguration as its custom orders. Obviously, reconfiguration will come with more labour costs and a significantly reduced margin on this tock, possibly even a negative margin, should this need to occur.
What we do know:
RFT will not get anymore orders from Tritium. This means around a 50% (rough) decline in the companies main source of income going forward.
What we don't know:
How is I-Charging sufficing in the current environment?
Will RFT get to keep Tritiums deposits? And how much were they?
Will RFT be able to reconfig/sell the stock intended for Tritium? And at what cost will this occur to the company?
How will the collapse of Tritium specifically effect the companies balance sheet?
Will the company have to go to court to retrive expenses related to said custom inventories that Tritium is not recieving?
How will new managment/board fare? Goin by the recent history, can we even trust them?
Will the comany recieve more contracts? Or is Tritiums collapse a signal that temporary EV charging income is under threat?
I'm not sure what doesn't make sense here? If I'm still not making sense, or wrong, can you point out the particulars, please.
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