RS:
I guess I've zoned out regarding not remembering the regional rollout.
If you, a massive G* optimist, is only guestimating 32K subs, and 3.8M MoU, then G* is really in horrible shape. Even with those numbers, which are higher than my guesses, I don't foresee G* being able to succeed. With those numbers:
1. It's almost a lock that G* would violate its 3/31/01 bank covenants, resulting in potential financial chaos. The banks/bond holders could cross default each other and send G* into BK if they chose. Fwiw, bondholders play much harder ball than equity holders. They go for the jugular.
2. G* partners would be "crazy" to put more money into the project unless they see potential that isn't reflected in the bottom line--why not wait six months and buy the company out of BK with a prepackaged deal? It could be out of BK in 2 weeks without any service interuption. Not a bad way to eliminate a few billion in debt
I don't like to sound like a conspiracy theorist, but the delays in rollout and marketing are costing G* massive amounts of time which, contrary to popular opinion, I don't think that G* has the luxery to waste (i.e., I don't think that the SPs will blindly throw $350 million into G* unless its clear that they won't need to put more in). The I* stigma is all over G* anyway, it's not like it'll be viewed worse in the public eye since "everyone" considers it heading into BK anyway.
I'm hoping that G* will survive, but I'm not too convinced (unless I'm wrong on the SP financing--BLS' promises don't get much weight in my book).
Not short G* or Loral, so don't go there. |
