To: Earlie who wrote (35685 ) 6/24/1998 6:02:00 PM From: mike iles Read Replies (2) | Respond to
Jeez Earlie you got me cornered and I have to discuss MU from a 'bullish' slant (I guess survival would be bullish for these guys) ... these are strange days. Anyways, looking at the semi business only they've burned cash at the rate of almost $200M per quarter for the last 2 quarters (don't know where MB got his $280M number from ... may be the consolidated number). The net cash at the end of May was -$423M ... I figure they can run to -$500M before the bank starts to get tight under the collar. That's the cushion that last year's convertible issue gave them (thanks Fido and Capital Noresearch)... it's not real debt (i.e subordinate to the bank, can postpone paying interest, will be converted to equity if the sh*t hits the fan). So let's say the have $75M leeway there and $750M coming in from TI, a total of $800M and change ... BTW, they can also take an interest holiday on the convertible part of the TI debt. At last quarter's burn rate (which I agree should be worse this Q), it gives them a year or so. So if you're right and memory markets don't turn for 12-18 months then they may not make it. I'm thinking this is a great deal for them because it gives them a decent chance at survival. And no, I don't think they will spend a dime on Italy or the JVs until they're done getting Boise in good shape and the memory market has turned ... IMO they did this deal solely for the cash and they took on these facilities only because that was the quid pro quo ... why would they put cash into something that's less efficient than Boise and 1000s of miles away?at the right price Appleton would be a good guy to back.
