good synopsis. nice to read other posts with some depth in the DD.
i think most of the near term success hinges on funding. obviously Bill/TPAC learned they can not use the toxic lending route to seriously fund expansion. further, it was probably used as more of a stop gap between certification and getting shop up and running until they could more easily present to traditional funders their plan.
Hong Kong is one of the biggest financial centers in the world and also, ideally situated to understand the political nature of doing aerospace business in SE Asia. getting funding together allows several things:
1. complete acquisitions providing solid, verifiable revenues that immediately take TPAC from potential mfg to existing
2. provide a track record of part completion/QA/QC with existing mfg production lines
3. have a proven track record (through acquisitions) with existing, large scale manufacturers where they do not need to start from the beginning trying to build the relationship/business
4. due to 3-allow a more immediate, receptive conversation on their own bearing line and the instant, cost advantages in China and elsewhere in SE Asia with respect to delivery capabilities and in China - being domestically situated.
as far as what the acquiring companies get - they are monetized. current owners get cash and a piece of a larger business with substantially less risk than they had going it alone. building equity in a business is critical but that equity can only be realized with a larger (or more financially equipped) buyer. further, small mfg in this space realize it is feast or famine. you have to grow and get real scale to be able to make it through the valleys.
as far as the banks/lenders - having the industry experience, share structure, and understanding of the market and specific, geopolitical factors to make this come together dramatically lowers their risk to lend. this is where being located in HK provides significant advantage. specifically in time to market which seems to be a constant struggle in the aerospace supply chain (as several on here attested to). by locating their primary mfg point in the country with the biggest growth potential and most confining cost restraints (relative to domestic production), it provides a natural "market" for existing manufacturers to choose TPAC for supply chain once the combined entity (post acquisitions) is established.
very sound on paper. is he pulling it off? that is the question. so far, he has retired shares, started production, got a major distribution partner, has met with some key industry players, and has been updating along the way. now he needs to finalize the financing/acquisition portion and it should be off to the races. he alluded in the tweets and discussed in a little more detail in prior conference call that the financing/acquisitions were going to be completed in conjunction which makes sense. that also makes it significantly more time consuming trying to get that many key decision makers together at the same time to finalize.
someone mentioned the 31st and completion of the PO. Bill addressed that previously. the parts have been run and awaiting delivery. in just-in-time supply - the mfg delivers the parts on an as needed basis and not in one lump sum. so - there should be no expectation that on the 31st they will have completed the PO. as i understood it - it was an open PO for $100K and the parts were to be delivered as needed. i am more interested in hearing about the part run being completed for the acquisition meetings in China per recent tweets.
i think most of the near term success hinges on funding. obviously Bill/TPAC learned they can not use the toxic lending route to seriously fund expansion. further, it was probably used as more of a stop gap between certification and getting shop up and running until they could more easily present to traditional funders their plan.
Hong Kong is one of the biggest financial centers in the world and also, ideally situated to understand the political nature of doing aerospace business in SE Asia. getting funding together allows several things:
1. complete acquisitions providing solid, verifiable revenues that immediately take TPAC from potential mfg to existing
2. provide a track record of part completion/QA/QC with existing mfg production lines
3. have a proven track record (through acquisitions) with existing, large scale manufacturers where they do not need to start from the beginning trying to build the relationship/business
4. due to 3-allow a more immediate, receptive conversation on their own bearing line and the instant, cost advantages in China and elsewhere in SE Asia with respect to delivery capabilities and in China - being domestically situated.
as far as what the acquiring companies get - they are monetized. current owners get cash and a piece of a larger business with substantially less risk than they had going it alone. building equity in a business is critical but that equity can only be realized with a larger (or more financially equipped) buyer. further, small mfg in this space realize it is feast or famine. you have to grow and get real scale to be able to make it through the valleys.
as far as the banks/lenders - having the industry experience, share structure, and understanding of the market and specific, geopolitical factors to make this come together dramatically lowers their risk to lend. this is where being located in HK provides significant advantage. specifically in time to market which seems to be a constant struggle in the aerospace supply chain (as several on here attested to). by locating their primary mfg point in the country with the biggest growth potential and most confining cost restraints (relative to domestic production), it provides a natural "market" for existing manufacturers to choose TPAC for supply chain once the combined entity (post acquisitions) is established.
very sound on paper. is he pulling it off? that is the question. so far, he has retired shares, started production, got a major distribution partner, has met with some key industry players, and has been updating along the way. now he needs to finalize the financing/acquisition portion and it should be off to the races. he alluded in the tweets and discussed in a little more detail in prior conference call that the financing/acquisitions were going to be completed in conjunction which makes sense. that also makes it significantly more time consuming trying to get that many key decision makers together at the same time to finalize.
someone mentioned the 31st and completion of the PO. Bill addressed that previously. the parts have been run and awaiting delivery. in just-in-time supply - the mfg delivers the parts on an as needed basis and not in one lump sum. so - there should be no expectation that on the 31st they will have completed the PO. as i understood it - it was an open PO for $100K and the parts were to be delivered as needed. i am more interested in hearing about the part run being completed for the acquisition meetings in China per recent tweets.
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