Dragonden,
The decision, in my view , to cut BC was to salvage the Avenor take over bid proposal. As you know, the "street'' did not react well to the avenor announcement (Dec. 16, 1997?). BC was cut to reduce the debt ratio upon the Avenor balance sheet - and it did. If you ever can get hold of the conference call tape between institutional houses, and Chairman Gagne (sp?), your answer would probably lie somewhere in there.
OF course, since the BC strike in 1995 (something Petty never lets his shareholders ever forget), there seems to be have been lingering negative feelings about that event at Repap. However, that didn't stop some very huge bonuses from being paid. I think Petty's alone was over 800M Canadian Dollars.....its in the current annual report.
On one level, is was cut to reduce the debt load on Avenor, to please the 'street' and perhaps save the deal. On another level, it may have provided Petty with a great excuse to cut loose of the mill. This is my speculation.
As for its current effect on share prices, honestly I doubt a strong effect....how?
Did they just give it to the banks.....yup!
I'm pooped, but I wanted to responded to you after two days.
Repap is still languishing, but again, as I've stated in my prior thread comments, I believe the current recovery in the coated market will give repap the momentum to generate outstanding second quarter earnings....this should pump up the stock. Beside, based on what I'm reading, suiters are in place......its just a question of due diligence. Combined with great second quarter earning announcement, and you spell a small surge in Repap share prices around early to mid July.
Good luck.
Fundace. |
