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Technology Stocks : Leap Wireless International (LWIN) -- Ignore unavailable to you. Want to Upgrade?

To: alburk who wrote (2116)	6/5/2002 1:25:36 PM
From: SKIP PAUL	Read Replies (1) \| Respond to of 2737

My 2 cents: Leap wants to be like Southwest Airlines but is behaving more like Peoples Airlines. They needed to watch every penny and they were out getting defrauded. I think managemnt of LEAP needs to go and the company restructured. I see a Vesper type restructuring.

To: alburk who wrote (2116)	6/5/2002 1:47:34 PM
From: pcstel	Read Replies (1) \| Respond to of 2737

What are your thoughts about renegotiating debt covenants and avoiding insolvency? Well. I think that you have to take the RUMORS of violations of the short term covenants at face value.. Which are simply rumors. As early as last week. Dan Pegg, Leap's senior vice president of public affairs stated. The company has been forthright about its cash position and is confident that it will be able to work with its vendors. "We entered into those agreements and we expect to meet those requirements," he said. Well, this was quoted 2 months into the current quarter. So I think that things are safe for Q2. However, regarding Tim O'Neil's funding shortfall figures in his report for CY02. I believe that he has made a rather large assumption. His report shows the following: Current Liquidity $271M Cash - $200M CAPEX - $57M EBITDA loss remainder of year - $35M cash interest expense = $21M current funding gap. Well first of all. No one says that LWIN HAS to spend the CapEx. As a matter of fact. I believe that Tim O'Neil fails to understand that the time period that LWIN has to spend the CapEx amounts that were previously stated from Jan. to Jan. has changed. And the amounts that LWIN plans to spend is also lower than the 200 million that Tim Quotes contributes to the funding shortfall in 2002. As a matter of fact LWIN claim they will only spend 185 million from April 02 to April 03. From the 10-Q "(our current plans are to borrow approximately $185 million for equipment purchases under these facilities over the 12 month period commencing on April 1, 2002) ." So his 27 Million funding gap is based on CapEx of 200 million all spent in CY02. Whereas management says they will only spend 185 million in the four quarters beginning in Q2 02. Even if we go ahead and say that they spend 185 million before Dec. 31 02. His funding shortfall is only 12 million based on management's statements. In addition, where is the 33 million from Pegaso? His 57 million EBITDA loss for the remainder of 02 is still 45 million dollars higher than the highest figure supplied by management. So if you plug in Management's figures. It looks like this. $271M Cash + $33 million from Pegaso - $185M CAPEX(assuming none spend in Q103) - $20M EBITDA loss remainder of year - $35M cash interest expense = $64M. That's a 90 million dollar difference of opinion! PCSTEL