TSX:SRV.UN - Post by User
Comment by
BlueJay2020on Jan 11, 2021 2:22pm
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Post# 32268527
RE:RE:Bid
RE:RE:Bidjcw604 wrote:
I think the only thing that they were trying to project is the chance of a SIR corp bankruptcy. As I have explained in previous posts, the SIR corp asset quality will significantly improve if it were freed from the contractual obligations to the fund unit holders. (Srv.un is a fund, not a regular stock). That is why they want to buyout the funds to remove that obligation. You currently the unit holders are forgiving them for not distributing the distributable cash. We are not their short-term liability. However, in the long run when things return to more normal, we will be.
I don't think that theory is credible (that the banks want SIR CORP to incur more debt now to obtain an asset that may or may not generate enough income in future to cover the repayments and interest). It would be more likely that the bank would be pressing them to reduce debt by selling the part of the Fund that they own.
But the real reason is simply that they are seeing an asset that they can get on the cheap.