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Strategies & Market Trends : IPPs and Merchant Energy Co.s -- Ignore unavailable to you. Want to Upgrade?

To: Oeconomicus who wrote (742)	12/13/2002 12:17:11 PM
From: Jerome	Respond to of 3358

Dynergy Analysis....where to from here???? From the Yahoo message boards.... Yahoo! Message Boards: DYN *** REPOST woogerbear's EXCELLENT POST: by: picotechnician Long-Term Sentiment: Strong Buy 12/13/02 11:53 am Msg: 191649 of 191654 By the numbers..you decide (revised 5 ) by: woogerbear Long-Term Sentiment: Strong Buy 11/24/02 04:41 pm Msg: 173553 of 173553 Sorry for the previous error CASH FLOW (excluding trading business) First 9 months: $388 million 1.Energy Network: $68 million 2.$62 million liquids 3.$258 transmission Estimated cash flow 2002: $500 million (due to $270 million needed in cash collateral). CAP EX. in 2003 stated in CC to be only $285 million which is a $540 million reduction versus 2002. Big upside in 2003 no downside due to depressed market conditions..Cash Flow should be $770 billion minimum..and $1.0 billion in cash flow with a decent market... Liquidity: Cash $974 million Natural gas storage $376 Bank lines $1.6 billion (mostly used up in lines of credit and draw downs) Total liquidity:$3.008 billion (as stated in conference call) Aditional liquidity over next 6 months: 1. Sale of Illinois transmission:$230 million(less than 10% of Illinois power assets) 2.Canada Assets $50 million 3.Additional $150 million in return from collateral CVX trading 4. Current cash flow 5. Another sale..communications,global liquids or something else Total liquidity: $3.438 billion (excluding cash flow) Current debt and obligations 1. $468 million Draws against bank lines 2. $200 million interim financing 3. $300 million Illinois power credit facility 3. Approximately $1.0 billion in used revolver (lines of credit for trading) 4. $190 million in bonds due 5. $1.5 billion CVX preferred shares obligations (not debt..cannot force bankrupcty..Illinois state law) Additional liquidity after next 6 months or possibly before 6 months from now: $ 1.0 BILLION in letters of credit and cash to be unwound from trading business (will take some time but real money coming back approx.$750 million minimum IMO) What's going to happen: 1.$468 million draws on bank lines paid with cash...upon refinancing of revolvers 2. $325 million bond offering for Illnois power pays for $300 million credit facility due May 2003 3.Re-finance a portion of open revolvers: $1 billion or less as needed like DYN does every year (over the next few weeks IMO); 4.$200 million interim financing paid with cash this quarter 5.$190 bonds due paid with cash after sale of Illinois transmissions end of year 2003 6. Receive $500-$750 million plus from lines of credit by mid 2003. Conference call clearly stated that there will be a minimal cash penalty on the $1.0 billion lines of credit..they will pay down debt with the additional cash..no doubt.. IMO 8. CVX the BIG question mark...my guess is CVX will extend the obligation out for the right to market their own assets. They'll want to continue to own 26% of the new Dynegy and receive a big gain on their write-off. All other current debt facilities are covered with cash that they NOW have..debt is also unsecured and 2003 guidance coming out before end of year (1 month).Dynegy's market cap at $350 million (should be 10x-20x this..under the above scenario),it certainly has the cash flow to handle the remaining IP debt and the cash flow to handle the remaining Dynegy debt and to the street...IT IS ALL CONSIDERED CASH FLOW FOR DYNEGY..these calculations show that Dynegy will eliminate approximately $900 million in bonds and credit facilities and refinance approximately $1 billion in revolvers over the next couple of months or weeks; paydown more debt end of 2003 from lines of credit received.They need to get the CVX preferred extended..it all depends on CVX...something will happen before Christmas on this front also...By the way nobody wants BK here: unsecured banks don't want it;Bruce Wiliamson doesn't want it (options at .88 cents);CVX doesn't want it (preferred shares wiped out)...you decide DYN Snapshot DYN 1.05 +0.15 +16.67% quotes delayed 20 mins - disclaimer Symbol Lookup Quote data provided by Reuters -------------------------------------------------------------------------------- Chart, Financials, Historical Prices, Insider, Messages, News, Profile, Reports, Research, SEC Filings, Upgrades, more... 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