A Very Good Post from Yahoo Board. Jeff was right!
The ugly 10Q
by: loselittlewinbig 05/11/04 11:11 pm
Msg: 233604 of 233629
Let's look at the one line in the 10Q that is most likely responsible for the sell-off today: <<We anticipate that, in any plan of reorganization ultimately confirmed by the Bankruptcy Court, our common and preferred stock likely will be eliminated entirely.>>
It would take a Clinton decoder and a pair of rose-colored glasses, but one could still see a glimmer of hope for the common. The line in the 10Q, the first time I read it, read like this: "SELL. NOW. DON'T LOOK BACK."
I didn't sell today. My situation with Loral stock may be a little different than other shareholders on this board. If my Loral stock goes to zero from here, I still have an overall profit from Loral stock (just to put my opinion in perspective). I don't like being "shaken" out of my stock--I like to sell on my own terms on my own timeline.
This is what shareholders may have on their side:
<<Loral is a holding company (the “Parent Company”), which is the ultimate parent of all Loral subsidiaries. In December 2001, the Company’s wholly owned subsidiary, Loral Orion (the “Subsidiary Issuer”), issued new senior notes in an exchange offer (see Note 12) which are fully and unconditionally guaranteed, on a joint and several basis, by the Parent Company and several of Loral Orion’s wholly owned subsidiaries (the “Guarantor Subsidiaries”). The Parent Company, the Subsidiary Issuer and the Guarantor Subsidiaries, as well as certain other non-guarantor subsidiaries of the Parent Company (including the Sellers and SS/L) filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code on July 15, 2003.>>
SS/L is a "Non-Guarantor Subsidiary" of Loral. Ask a bondholder what that means. The rules may change after a BK filing. SS/L will "likely" file a separate Plan, from what I've read. If shareholders want something out of this mess, they will probably have to hire an efficient and capable lawyer. Preferred shareholders are probably no help to common shareholders, since the Preferreds appear to have been thrown into the pile of "general unsecured claims" and "liabilities subject to compromise" and "likely to be eliminated". Preferreds will fight for their own cause, not the common cause, most likely. Did anyone else notice this about the preferreds in the 10Q?:: <<Because we have failed to pay dividends on the Series C and the Series D preferred stock for six consecutive quarters, holders of the majority of each class of such preferred stock are now entitled, subject to the applicable effects of the Chapter 11 Cases and Loral’s Bermuda insolvency proceedings, to elect two additional directors, for a total of four directors, to Loral’s Board of Directors. >>
Also worth noting is Backlogs: As of March 31, 2004, backlog for SS/L was approximately $495 million (which does not include approximately $195 million for the construction of two satellites for satellite orders that are currently being finalized), including intercompany backlog of approximately $119 million. At December 31, 2003 backlog for SS/L was approximately $536 million (which did not include approximately $240 million for the construction of two satellites for satellite orders that are currently being finalized), including intercompany backlog of approximately $145 million. >>
<<As of March 31, 2004, Satellite Services had four satellites in-orbit (including one launched in January 2004 that has a problem with its solar array deployment, see above) and one under construction. At March 31, 2004, Satellite Services’ backlog totaled approximately $827 million, including intercompany backlog of approximately $36 million. At December 31, 2003, Satellite Services’ backlog totaled approximately $ $1.3 billion (including $479 million related to the North American satellites sold to Intelsat and intercompany backlog of approximately $37 million). >> |
