RE:RE:RE:LTD - $4B is realisticEasy there with the reverse split Pablo.
Everything else you wrote is fine. Taking the A's private I'm ok with. But that's the Families choice. If they want to stay in, or take their money out or some of it and go. But even there it's too early IMO.
But the negative split of the B's are going to hurt the ascend of the B's like crazy. Especially in the short term.
IMHO. If they leave everything alone for 2 years on the share structure? The Family will benefit tremendously. First they would create a strong foundation, and direction, for BA as a stand alone. Second, 2 Years will give them the benefit of some Positive FCF's of maybe 50 cents EPS (guessing maybe higher/lower). Third, the Evaluation of BA will increase the SP automatically after we have some Financials in the Quarters, after the BT closing in 2021. Fourth the cash on hand will give them protection on future Junk Bond debt maturities to be paid off. Fifth, the other JB debt maturities of 2024/25 can then be refinanced at a lower rate. Sixth, the Ratings Agencies will favor us in a couple of years.
So my question to you is? Why should the Family rush out to get all this extra cash on hand when they don't even have a placement for the cash they have on hand even. The A's are the Families money. They can do as they want. They have 100's of Millions of the B's as well. So why would they go out to get extra cash right now by selling the A's privately when they're flush with cash after BT closing? They already control this company. Why not work on increasing the share price of both A's and B's. If they want money in the future, and the SP, of both A's and B's are high? They can unload B's. If they increase the Value of B's, the A's will be worth a fortune. Maybe then, the Family can start selling the A's to eachother, at the going share price, if some want out.
IMHO. it is important for the Family to stay the course. The only benefit would be refinancing for the family, for lower interest rates, for future JB debt. If they pay the penalties today for the refinacincing early? They may save long term debt interest paid on those high interest JB's. Or even buy back a lot of Senior Bonds, but even there it's unnecessary as well, because they can lower the interest paid on maturities as they renew them. The Family is the only one that knows what the best direction to take is here. The rest of the Family now has to watch this PB imbecile with there leftover nest egg. Maybe that's why they took over the board of directors as someone just posted.
In MHO. They can do very well without bending over the current loyal shareholders, that were true, and stayed with them through this whole mess. Or even risk their own Family holdings with share shell games.
BTW. Thank you for your other post on the financial breakdown of the closing funds, from BT. I don't think you're far off on the debt left over. I like the possibilities of increased income from the different sources of the BT closing. The good part of reducing debt to the $4B range is that. The traditional financing can start to kick in for BA. IMHO. That's where the Family should direct their focuss on after closing for the whole of 2021. They have all been through hell with these mistakes from Pierre B, and so have we the shareholders.
Cheers.
PabloLafortune wrote: Raph, a good amount to raise would be USD 1.9B or C$2.4B @C$1.50 (1.6B shares). Brings debt down to $2B and gives us a $1.92SP at 8B (USD) EV, $1.28 at 6B EV, $2.84 at 10B EV. Debt is under control, interest cost way down. Take the A's private (like BRP) would help as would a reverse 10:1 and change the voting ratio from 10:1 to 6:1 (goodwill gesture) for the A's. They'd even be able to afford buybacks...all IMO (or IMI) of course. GLTA.