RE: RE: RE: RE: The banks are right, YLO numbers!!
I strongly believe that this is going to CCAA UNLESS the banks can offer an alternative in terms of:
- Extending the $250M revolving tranche credit facility (due Feb 2013) - likely at a higher interest rate, therefore, higher interest burden for the company, less FCF, etc
- Renewing the non-revolving tranche ($155M due Feb 2013) - who knows what the repayment terms of this would be?
- Ease the restrictions associated with the borrowing agreement to allow for buying MTNs on the open market
- As a part of this agreement, Tellier steps down, new BOD elected with 2-3 directors representing the banking syndicate. Banking syndicate installs the new CEO subject to shareholder approval at AGM
- Shareholder confidence grows slightly with new management (shaddowed by banking syndicate) and sp may recover slightly as SOME time is bought to improve the b/s
...
But as others have pointed out, WHY should the banks take the risk? Why should they bail out Yellow? What scenario allows them to recover the most capital and achieve the greatest return? They may be crunching the numbers but I guess that by now they've made up their mind.
Can the banks submit an ammended CBCA to the judge at this point and would this require ratification from the various classes in a vote?
Or at this point have they already decided to walk away completely?
This reminds me of that scene from "the good, the bad and the ugly" expect I'm not sure who is "the good"