HMAR Chapter 11 Not Unexpected
Extracted from the Quarterly Report released Aug 16, 1999:
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“In addition, an interest payment of approximately $12.5 million is due on the Senior Notes on August 16, 1999. The Company does not have sufficient funds to make this payment. If this payment is not made by September 15, 1999 and the possible restructuring plan discussed below is not consummated, the Company will be in default under the Senior Notes, and payment thereof could be accelerated. This would likely have the effect of requiring the Company to seek protection from its creditors under applicable bankruptcy laws.”
Do the words "The Company does not have sufficient funds to make this payment", ring a bell?
From today's Chap 11 Filing:
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““As previously reported, the Company is in active discussions concerning a proposed restructuring plan under which its general and trade creditors would be paid in full; its existing credit facility would be refinanced; holders of its Senior Notes would exchange their Senior Notes for common equity of the Company; and holders of the Trust Convertible Preferred Securities and Common Stock would receive common equity and/or warrants to purchase common equity. Implementation of the plan is subject to numerous conditions, including the need to reach agreements with lenders and other third parties, and is expected to result in substantial dilution to the Company's current stockholders.
''Today's filing helps remove the cloud of uncertainty that has hung over the Company for the last several months and gives us time to put our financial house in order,'' commented Jean Fitzgerald, Chairman, President and CEO. ''While a number of issues remain to be worked out, the general outline is in place and has the support of our major creditors. The end result will be a significant deleveraging of our balance sheet, which should in turn strengthen our operating capabilities and enable us to be a financially sound and competitive enterprise going forward.''"
The words: "and is expected to result in substantial dilution to the Company's current stockholders." are classic. Hell all they are saying is more shares will be printed to secure new financial arrangements. Whats new? The REAL dilution has been share price and that is NOW HISTORY.
This ought to be one helluva an active issue today and should come as no surprise to those who have followed closely.
The next issue which will very likely arise is that of "Delisting" from the Nasdaq which is independent of the Chap 11 issue. If this should occur, this is the procedure:
Hmar will be notified by NASDAQ. The notification from Nasdaq will indicate HMAR is being notified that it has 30 days from (assume today) October 9, 1999 to increase its shares to above 1 dollar per share for a consecutive 15 days or HMAR will be delisted. HMAR has the option to do a reverse stock split, informing Nasdaq within 15 days from the notification. Or HMAR could be moved to the otc.bb / (pink sheet). If delisted, there will still be a market for HMAR(Q).
I have traded thousands of "Q" company shares on DATEK without difficulty.
So there it is folks, another cloud has been lifted.
SPIN THE WHEEL!!!!!!!!
SargeK
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