Post by
Thethruthhurts on Jun 13, 2014 7:49pm
Something to be said for clear thinking
Again I wish I wrote this myself. Yet another colleague sent me his thoughts on the latest borrowing play at Armtec. Life throws us all lemons. Bright people make lemonade. Other bright people grow dope these days! The remainder….just keep collecting lemons. I still say that Armtec could have gotten themselves out of this situation with some good decisions. Instead, almost all of the decisions have been bad. More debt is NEVER the answer to too much debt (unless you’re terminal and want to go out with a bang!). Armtec never should have replaced the banks with Brookfield. They should have told their syndicate to screw themselves and that they were in this pickle together. The Chief Reputation Officer at the large banks never would have allowed the lender behaviour that Brookfield has demonstrated. Armtec burned up so much cash flow on fees and debt service and in the meantime, they haven’t paid back any principal. A Company reorg was in order. They should have sold the half of the businesses that didn’t support the “new” Armtec strategy and operated a smaller but much less levered company and keep the cash that they generated. Bad decisions. The Board should also be ashamed of itself. Now their assets are underperforming so badly that they would not garner good value at all. Even if all they sold was the legacy drainage business before the western price war and maybe Brooklin/Boucher, they would have been back on solid ground. I don’t understand the desire to try to hold onto everything. It defies logic. Begs the question from Samuel L Jackson -- "What's in Your Wallet??" Capital One might have been cheaper. #Armtec #MarkAnderson #poorly run company #Armtecinvestormeeting