RE: RE: RE: RE: RE: RE: Tellier out, market yawns I'm still not convinced that ,with a bit of will and smarts, Tellier couldn't have gotten over the 2014 hump. Suppose:
- he had protected his ability to invest in debt
- he hadn't spent interest from fully drawing down his line of credit and holding cash in an effort to play chicken with the banks
- he had saved the money spent on the restructuring and the associated court case.
akaell, I find your perspective interesting and I think we agree on most of the key bad and good decisions by Yellow Media. But...
The banks leting Yellow Media spend money buying back debt was never going to happen. The only thing the banks cared about was getting their money back (which, in the end, they didn't accomplish). Nothing Tellier said or did could have persuaded them to allow Yellow Media to redeem debt that came due after the expiry of the bank loan.
The draw down of the bank line of credit wasn't playing chicken. It was a means of getting more goodies (more of the banks' money) to distribute among the creditors and make it easier to come to a deal. The banks hated this (understandably) and fought it in court but the final settlement with the banks left them considerably worse off than they would have been if Yellow Media didn't do a line of credit drawdown.
The interest payment on the line of credit drawdown was trivial.
Given the bank position (pay us back in full and on time) and the bondholder position (don't pay the banks back in full and on time) it's hard to see how Yellow Media could have avoided some sort of legal process.
From the outside, it looks to me like both the banks and Yellow Media could have done better if they had worked out a deal with the banks instead of the bondholders. But I have no way of knowing how flexible the banks would have been. If Yellow Media approached the banks and got a clear message that they wouldn't be flexible, the bondholder deal seems reasonable to me.