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Yellow Media Inc T.YLO



TSX:YLO - Post by User

Bullboard Posts
Comment by poneon Feb 21, 2012 1:40pm
233 Views
Post# 19562126

RE: Pay back $236mil now

RE: Pay back $236mil now

Lestat, where do you get any of those assertions on repayment?    

 

YLO cannot repay the MTN 2013 at par value from current EBITDA.   That's key, and your assertion of the opposite is just wrong.

 

YLO definitely cannot repay the MTN 2014 at all, unless that maturity is extended.

 

You shouldn't make statements like until you have spent hours in a detailed Excel model working the cash flows on paying back maturities.

 

The only chance Yellow has to pay back MTN 2013 is if they can buy it for 50 cents on the dollar now until maturity.   And the credit line terms specifically forbid them from doing this if they don't leave $125M unborrowed on the credit line.   They took down the entire credit line, so there is no way to pay back 2013 MTNs at this point.

 

If Yellow cannot renegotiate the bank credit line terms, or if Yellow cannot get private financing to replace the restrictive bank credit line, Yellow isn't going to avoid CCAA.     A lot of the posts here are being extremely naive about this.    The problem is NOT about valuing Yellow on EBITDA or earnings.   The problem isn't whether Yellow has a viable business.   The problem is all about cash flow and debt maturities, and how those things interact.    People here are talking about the wrong issues.    This is a liquidity crisis, so people should be focusing on liquidity.

 

Bullboard Posts