GREY:PEYTF - Post by User
Comment by
cashman4on May 16, 2013 1:53pm
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Post# 21404258
RE: RE: Rick Alexander
RE: RE: Rick Alexander He has some hard decisions to make. Usually trusts take years to get into this crunch where distribtuions are being paid as debt is increasing. PLT managed to do it in just two years.
The Trust model does not work with such high debt, especially when the trust financed its 1st quarter distributions with mostly debt. In any respect, the trust must deal with the massive debt by paying it off or by issuing trust units. In any respect, the pie will shrink for unit holders.
If the trust issues new units at price of $3.75 to repay $156 million debt, then the distributions may decrease by up to 30% per unit, however, the total return to unit holders will be a lower risk 12% which seems acceptable.