Pierre, I have to preface this by saying that I have never managed a junk bond portfolio, so I may not be the best PM to ask. However, here is my opinion for whatever it is worth.
Motorola and friends have two other options. They can offer bondholders equity in lieu of their bonds, a very common junk bond scam in the 1980s. Or, they can offer to redeem the bonds at less than par, with the threat to walk away if that is not agreed to.
So, there are ways for Motorola to squeeze out revenues without paying bonds off at par.
The question comes down to what is the investment and likely returns on Irdium worth to Motorola. It would hurt their prestige to walk away and they are not known as a sleazy co. But shareholders of the parent would not be thrilled about taking a hickey on this white elephant.
So, the key is for somebody to figure out what Iridium is worth, if anything, and if that sum is worth Mot and others anteing up more. My suspicion is that they will try to perform CPR on this dead cat, but I could be off base. |
