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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: ptanner who wrote (147001)	5/9/2002 12:33:13 AM
From: tejek	Read Replies (1) \| Respond to of 1573791

The lender probably wanted the clause rather than DYN. Otherwise, it may be a buying opportunity if the risk from this clause is being exagerrated in the market's response. I haven't investigated this one as I already have one troubled independent power producer in my portfolio which I believe has a more solid balance sheet: CPN. While they are trading at a lower discount to book value their book value has a high cash composition and the company has been responsive to concerns about its position post-Enron. PT, its a recourse clause and I suspect it was put in by an attorney. In one of the contracts, its states that the other partner has recourse against DYN up to $270 million should DYN fail to perform. In addition the SEC is checking to see if they used tax shelters illegally. I am not particularly thrilled about their recent convertible offering or the pending (?) 20% dilution from additional shares but they were both actions consistent with the company's stated financial program for balancing debt and equity. You mean CPN, right? All the utes are having to do that.......they took on too much debt at high interest levels. DYN was the company that was going to buy out ENE at the time of its collapse. At the time, business articles were saying that it was too bad that ENE was not as well run as its crosstown neighbor, DYN. I guess some things have changed in less than a year. As for its balance sheet, DYN has $10 billion in debt which isn't horrible for a company that generates $42 billion in revenues each year. However, it has only $218 million in cash; in other words, it can't afford recourse clauses that might prompt a call for $270 million suddenly. ted