RE: RE: 241/2 cnts per share for 1.28 new sahres?The letter of credit is not really anything.
Basically WEF has no more liquidity, and the letter of credit simply gives it some room until the rights offering.
WEF had a $100 million non-revolving debt line, and it paid off 43 million over the last couple of quarters. So it has only about 57 left, of which it is using it all.
Also, WEF has a $75 million revolving line, of which it is using $74 million.
Plus, there is cash of about 5 million.
The letter of credit is simply BAM guaranteeing a bridge loan that will expire as soon as the rights clear. The loan will be made from either the revolving line, or non revolving line... doesn't matter.
The critical thing is that the non revolving line comes due in Sepember 2009... that's a $57 million payment. Now, after the rights offering we will have an extra $50 million, but by September we may have already burned through half of it.
So, in order for WEF to stay solvent, it needs to sell some assets, probably at least $40 million - $50 million so that it can make the Sseptember payment.
Tricap owns no debt in WEF... all the debt is made from GE capital, so there is little chance that Tricap could take us out through a bankrupcy.