Question-and-Answer Session
Operator
Thank you, Mr. Edelman. At this time, we’ll begin the question-and-answer session. (Operator instructions) The first question comes from David Driscoll of Citi Investment Research. Please go ahead.
David Driscoll – Citi Investment Research
Great, thank you. Good morning, everyone.
Thomas Edelman
Good morning, David.
Scott Pearce
Good morning, David.
David Driscoll – Citi Investment Research
Could you guys just walk me through the sources and uses of cash here on our consolidated basis? I think you made the comment, Tom, that on the operating subsidiaries that you saw that the cash positions were sufficient to continue to fund those operations, but I am – I want to understand the fully consolidated basis when we look at where your – where are the positions that are out here and I also – please correct me if I am wrong on this, but upon completion of these plants, you will have additional access to working capital lines that’s not currently available. I believe that’s something you had mentioned on the last call, but again, could you guys just start off with the macro here on the fully consolidated basis, sources and uses? What’s going to happen over time here? Do we have enough liquidity that – to keep this thing running properly?
Thomas Edelman
Well, I think the difficulty is you can't look at it on a fully consolidated basis. The fully consolidated basis is what is sitting in front of you in terms of the 10-Q and the press release, David. The peculiarity is that we are under, as you know, very complicated project finance borrowing arrangements under which these plants were financed and built. And when in the second quarter of this year we had not yet started production at the plant, but were being urged strongly by certain of our shareholders and Cargill to protect ourselves on the corn price, there was no ability to enter into any contracts yet because we weren’t operational at the operating subs. As a result, all the hedging that was done with Cargill was done at the parent company level. And that parent company, at the time, because of proceeds remaining from the public offering, was perfectly able to do that and only as a result of the $50 million in losses that it run out of the ability to cover first its margin calls and then ultimately once the contracts were closed out the announced due to Cargill relating to those contracts. So the net result is that as we speak at the parent company there is $17.5 million of unsatisfied (inaudible) related to the hedging due to Cargill. There is about $5 million of cash that we consider close to at least a comfortable amount to be sitting in that company. And there is some restricted cash relating to the natural gas and other utility LCs and guarantees that have been put up. So, the parent company cannot, either with regard to Cargill or with regard to the sub debt, cannot currently cover its full obligations. And we need to resolve that problem.
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