Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from [Richard Olson - In Bridge Capital].
[Richard Olson – In Bridge Capital]
I just wanted to check a couple of balance sheet items real quick so of the $190 million in cash? How much of that is true liquid cash that you have access to right now.
James Ream
I would say we have about $16 million in true restricted cash for workers comp possible claims in the future that we have in escrow and we have some credit card hold back. That's probably about $20 million. So if you back out those two, that's the amount that we have as true usable cash.
[Richard Olson – In Bridge Capital]
What's the interest rate that the [ARS] is earning right now?
James Ream
LIBOR plus 175.
[Richard Olson – In Bridge Capital]
So given you've got roughly $160, $155 million in cash. You've got about $185 million of appraised collateral. It's a hefty chunk of assets so I'm just curious, revisiting the decision about deciding to take shares to redeem the notes. How do you explain that to shareholders that it was more appropriate to issue shares and cause the [law of dilution] as opposed to financing or utilizing the cash that you've got.
James Ream
Well where the industry is right now access to capital is very uncertain. And we're going through quite a transition with the amount of ASM's being pulled out and our ability to resize the cost structure in a time frame that gave us enough comfort that using the cash we had or having some guarantee that we would have access to the capital market put us in really giving the note holders an option.
I think we gave them a pretty solid market rate bond to look at with collateral protection so they had a real secure transaction. But obviously coming out of cash right now, we just didn't feel it prudent given the uncertainty in the industry, and certainly in our ability to respond to a new deal with Continental, and the uncertainty around access really wasn't [inaudible] get financing in place in time even if we had pretty solid assets.
[Richard Olson – In Bridge Capital]
Why not? Why not just redeem or negotiate with half the bond-holders, redeem half them in cash or redeem three-quarters of it in cash or whatever cushion you might need to prevent this massive dilution?
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