Well, I certainly think there is a distinct possibility that the common s/h will get zero'd out...the debt holders would have the absolute right to do that if a bankruptcy led to a liquidation proceeding that left the debt holders impaired.
I just believe it's more probable that a reorg can be designed that leaves everyone a lot better off than they would be in that scenario, especially considering that a plurality, and maybe a clear majority, of the debt is held by parties (Loral and Qualcomm, mainly) with some interest in the equity and a great deal of interest in maintaining control of an ongoing business, and in getting this issue resolved quickly. So, a formal bankruptcy is somewhat unlikely, and a liquidation proceeding almost inconceivable, imo.
My guess at a restructuring scenario runs something like this:
Debt holders get one share of GSTRF for each dollar of debt they hold...that's 3B shares added.
PI holders and GSTRF common s/h get rights to buy 1 share or PI per share they already own for 1$ per share (4$ per PI). That adds 150M equivalent GSTRF
shares (I don't expect Loral or Qualcomm to subscribe) As part of a package of price concessions at the wholesale and retail rate, most of the other SPs
probably would subscribe (it's pocket change for them and the only way they can get more public money. If the SPs are in, most GSTRF s/h will subscribe or sell
their rights to someone who would. )
At the end of all this GLP has the equivalent of 3.5B GSTRF shares outstanding (of which Loral will own 28-30%, Qualcomm 18-20%) no debt and 300M$
cash.
What's a share of GSTRF worth at that point? More than a buck, anyway, right? |
