Agenda Packets - 1986/10/13 - Laserfiche WebLink

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borrowing capacity in terms of the 5.5 factor times oper- ating cash flow is reasonable. However, the borrowing capacity of North Central will be highly dependent upon the level of operating cash flows being generated from their cable systems at such time North Central would seek to bor- row additional funds. The accuracy of the cash flow projec- tions of North Central cannot be determined without an indepth analysis of revenues and expenses as presented. Nevertheless, assuming the cash flow projections of North Central are reasonable, Mr. Cattoor can conclude that the borrowing capacity is more thantsufficient to meet the pro- jected $11.4 million shortfall. Additionally, North Central has confirmed that should it find additional funding to be necessary, it will endeavor to first utilize any available equity or credit facility before initiating any discussions with the Commission or its member cities with regard to franchise or system modifications. IV. OTHER COMMITMENTS North Central has also documented other commitments and assurances which address the questions and concerns raised at the Commission public hearing. Specifically, North Central has acknowledged that it understands and accepts all of the provisions of the franchise and affirms that it will comply with the same. Additionally, North Central has agreed it will not initiate with the Commission or its mem- ber cities discussions of changes in the community program requirements of the franchises prior to one year from June 1986, if ever. North Central has also confirmed that its obligations under the franchise are guaranteed by the per- formance bonds and letters of credit now in place, which bonds and letters of credit are in turn guaranteed 50-50 by Continental Cablevision, Inc. and Hauser Communications, Inc. Finally, North Central has provided evidence from Continental Cable Vision, Inc. that it will utilize its best efforts to borrow an additional $3 million for other busi- ness requirements. It should be understood by the Commission that to date no detailed analysis of the North Central pro formas (revenues, expenses, capital expenditures and other items) has been performed. It can only be concluded at this point that the amount of funds necessary to acquire the system appear to be in place supported by a loan commitment from First Bank of Boston for $50 million, and equity investments from Conti- nental for $13 million and Daniels b Associates for $7.6 million. - 4 -