This mix of companies will not earn 10% before interest and taxes, so Breen is either fooling himself or the public so he can accomplish the refinancing.
Roughly, 10% or $3,600,000,000 less $1,000,000,000 interest on net debt (at rates that could not be obtained in a refinancing), less the 22% tax rate stated in the 9/25 conf call, equals about $1.02 EPS. About 33% to 50% less than the $1.50 to $2.00 range Breen ballparked. There are legal and EPA remediation risks, too. And governance issues. You can't have a change of control quite as easily as has been portrayed (all but 2 directors won't be renominated). Breen can only get control of the board and the company with shareholder consent, I would guess. I think the board should be shareholder/independent controlled, and would not be surprised if New Hampshire or some other regulatory body requires it. Or the lenders. BTW, where was Breen for the call, in Boca or New Hampshire or Bermuda or at Boies' office?
Boies was supposed to have been finished by now, but on the 9/25 cc we learned he is 40% finished, and from the 9/19 news release, the company put out that they have no obligation to provide updates to statements made on the cc. If the company ultimately really earns 8% and average interest cost rises to 6%, with the same 22% tax rate EPS would be $.66. Still a valuable company, but the shareholders should have better oversight over Breen. Too much of shareholder money has gone out the door only to be slowly and reluctantly disclosed. |
