As PCSTEL says, they accepted a major reduction in debt [80% wiped off] contingent on QUALCOMM adding a lot more money to Vesper, which provided security to the remaining 20% and should enable Vesper to make money and pay interest and principal on the remaining debt.
Leap isn't in such dire straits [yet]. So I don't see why any write off would be acceptable to vendor creditors at present. I guess the vendor creditors will let Leap continue, [because Leap's assets are really only of value where they are installed and as a going concern], collect their interest payments and hope that Leap gets some of that EBITDA stuff in sufficient quantity to pay the itda and buy more equipment to expand the network and defeat competitors.
If I was a vendor creditor, I wouldn't be in a hurry to cause trading problems for Leap. But neither would I be in a hurry to accept that I should write off some of my supplies to Leap. There's money in the bank, more is rolling in, sales growth is fine, prospects further down the technological highway look good for Leap.
But that's not to say that other creditors or shareholders have got anything of value left.
As you say, at some price, Lucent and Nortel would take a haircut to get cash in the bank, to keep other aspects of their business on track. But I don't think they'd accept anywhere near a Vesper-style 80% reduction at present. However, there are obviously going to be some great bargains in the telecosm as assets go on the block and minute and megabyte prices drop to clear the market and boost demand.
As you say, cash is a useful thing to have right now instead of losses, dodgy accounting and EBITDA but no EBATDA.
Mqurice |
