DISCOVERY AIR INC 8.375 PCT DEBS T.DA.DB.A

RE: Growth Strategy

[Mongoose11]

It's good to hear from you again Stanmore.

I agree with all of your points but would like to add another. It is becoming clearer and clearer to me that Clairvest really runs DA. It is in their interest to increase debt levels and reap the benefits of the inflated 10% interest rate that they charge. I understand that the interest is only accrued but it adds to the debt owing to Clairvest which simply increases their hold on the company. At the same time their debt is secured and prohibits dividend payments to us lowly minority dhareholders.

In summary, I'd say that DA is great for Clairvest, not so much for us.

I'm disappointed that a company with the great potential that DA has is being used as a self serving profit centre for the overwhelming benefit of Clairvest. Couldn't DA have found another secured lender (or lenders) that would be more palatable to existing shareholders than Clairvest? Hell, 10% seems like an onerously high interest rate to me, especially since the public debentures (unsecured and without any say in how the company is run) only pay 8.375%!!!!! To make matters worse, the deferred interest payments to Clairvest have llowed DA to blow the cash on horrible acquisitions.