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Concordia Healthcare Corp. > Hodgins

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Post by thedave2006 on Oct 22, 2016 7:31pm

Hodgins

It is a call option on whether the debt holders will start declaring bankruptcy. The strategy had a lot of merit. They made a mistake by taking more debt for their UK acquisition when the financing was not fully lined up for it. Brexit caused the company to decline, but the debt was in US$. It is crushing the company.

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Comment by cg16 on Oct 22, 2016 7:38pm

Dave, wouldn't there need to be a default first?

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Comment by Lumberfeverlong on Oct 22, 2016 8:49pm

Yes CG, there indeed would have to be a default first. Perhaps the Dave could enlighten the Board on how that is going to happen when the Company has $500M in the bank.

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Comment by Lumberfeverlong on Oct 22, 2016 8:41pm

A few clarifications shorty. They did a currency swap on the a large portion of debt at 1.30 so they are nicely in the money on that. Second, when the Amco transaction was first announced the Cinven earnouy was valued at $220 USD. At today's exchange rate, that payment is now valued at $175M. The depreciation of the pound is actually helping the company to a significant extent for now ...more

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