ramblur Posted February 19, 2012 Share Posted February 19, 2012 I've seen discussion elsewhere as to whether our revolving loan is an overdraft.In the 07/08 DCFC accounts,page 25 and note 27 "Analysis of changes in net debt" you will see that overdrafts appear as the second line,below cash.In actual fact,in this analysis and the cash flow statement,an overdraft is effectively treated as 'negative' cash. 07/08 shows that the overdraft fell from £6.107m to £894k,a drop of £5.213m.However,if you look at the same debt analysis in the 09/10 accounts you'll notice that the 'overdraft' line doesn't exist,which proves that the revolving loan isn't an overdraft.It actually appears below,lumped together with the £1.7m GSE loan. The facility to borrow against S/Ts has existed since 1998 and there are 4 charge documents relating to it,the last one being Nov 08 under the current regime.I can only assume (though I don't know) that they represent loan segments,each giving authority to borrow up to a certain amount. The 07/08 cash flow statement gives a figure of £1.509m in respect of repayment of secured loans.This means that,even assuming this debt repayment related to this class,that the most that could have been borrowed in this category in 06/07 is £1.509m (and it could have been nothing). If you're scratching your head thinking how can the repayment of debt be this small amount,when I've earlier said that the overdraft reduced by £5m+,the answer is that any movement in overdraft doesn't appear in the main body of the cash flow statement.The final figure "increase/decrease in cash" actually means cash net of overdraft,i.e (cash less overdraft) at end of year less (cash less overdraft) at start of year. Going back to 09/10,Glick's assertion that £4.1m of debt was repaid in early July 10 is interesting,and looks to me to be impression creating.The net debt at the end of the year was £19.1m (the actual debt was £20m+,due to £1m+ of cash),so the impression created is that debt is down to £15m.In actual fact the long term debt is c£15.5m -there's a c£500k worth that appears to be reduced by a very small amount each year. Apart from this and a tiny amount of HP,the only other debt is the £3m revolving loan and the £1.7m GSE loan.Therefore,if £4.1m was repaid this implies a part repayment of the GSE loan to the tune of £1.1m,which appears a little odd and rather coincidental.Still,the accounts will tell all. Link to comment Share on other sites More sharing options...
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