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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here
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To: rrufff who wrote (12797)3/28/2005 1:36:23 PM
From: Rob S.  Read Replies (1) of 12823
 
I don't know exactly what the outcome will be, of course, but look back at what the company has said in the past, particularly leading up to the more recent announcements: SRT management said that they were likely to renegotiate or get new round of financing by December. Then they said late last year that sales backlogs were increasing and announced several large orders. And then they lowered the bombshell that some vendors of parts were curtailing shipments due to credit concerns and this has led to inability to service some orders. And that led to a more drastic cut of employees and more statements about negotiations for refinancing. But those statements brought out what might of been figured as being obvious: that concessions from the current debt holders were needed so that the new round of debt would have a senior position. In other words, if SRT fails to achieve profitability within the next several quarters after being granted the restructuring of debts, the new debtors would have priority during liquidation or other outcome. But that brings up the obvious question: "What will the existing debt holders allow?" Will they go along with being shoved aside into a junior debt position?

Shareholders are the low men on the totem pole: they won't likely get anything if SRT either doesn't survive And their position would be adversely if the debt restructuring dilutes ownership. The trend does not look favorable imo. My guess is that common stockholders will see their investment, at best, diluted significantly. At worst, SRT will go bankrupt and be liquidated. Or, they could agree to be acquired for debt or some fraction of debts. I don't think the company is likely to be acquired for a price that nets shareholders more than a token amount of the current stock price.. and even that is likely to come only upon agreement of debtors to discounts. But I have not had access to the company's books and have not researched this with customers, suppliers and debt holders - so take it for what it is, mere speculation.
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