To: gg cox who wrote (232750 ) 1/8/2014 11:30:12 AM From: gg cox Read Replies (2) | Respond to PDL ""The first thing is that the forecast implies that they won't generate enough cash to cover interest . That is a huge problem for PAL, and their lender, Brookfield Asset Management (BAM). That is because PAL will have to accrue that interest at the extremely expensive rate of 19%. forecast year end senior debt of $252,000,000. That means they will be offside their covenant at year end and in default of their loan to BAM. This can only be realistically avoided by either re-negotiating with BAM, a very costly exercise as indicated by the $8.1 million fee to get an additional $21 million with some covenant relief, or they can raise an additional $20 million of equity (above other needs) to pay down some of their senior indebtedness. An equity raise of the size PAL needs will be highly dilutive. We'll re-examine that point toward the end of this article."" seekingalpha.com
