Myth465 Posted February 10, 2009 Share Posted February 10, 2009 This article is quite interesting - http://www.globeinvestor.com/servlet/story/RTGAM.20090210.wrabitibi10/GIStory/ Anyone have any thoughts or insights on whats in it for Fairfax and Steelhead? Link to comment Share on other sites More sharing options...
SharperDingaan Posted February 10, 2009 Share Posted February 10, 2009 Were Abitibi in CCA, debtholders would essentially need to do a debt to pref share swap to refinance the company. In practical terms only the better assets would be put into new coys & refinanced. The poorer assets would be discontinued. Pension shortfalls would be dealt with through some kind of pragmatic compromise arrangement. At 15.5%, we can reasonably assume that this new debt is secured against the better assets. Each new coy would likely be regional, have a very strong BS, & would probably include seperate subs in 2-3 LOB`s. Providing it was done quickly the coy`s would also be profitable, as all existing Abitibi contracts could now be met through fewer plants - generating higher thoughputs & minimizing fixed costs per ton. 1st stage rationalization. But to get a piece of these coys you would have to be an existing debt holder, & essentially agree to a `pre-pack`. Where Abitibi leads others will immediately follow, & subs in the industry`s various LOB`s will get traded (same as hockey). Fewer, bigger, & the most efficient plants in specialized sectors - owned by coy`s that become proxy`s for that segment. Pure, & profitable, plays that facilitate investment. 2nd stage rationalization. It looks like the long awaited industry rationalization has begun, & that FFH is essentially positioning itself. Hopefully, we`re more or less correct. SD Link to comment Share on other sites More sharing options...
Partner24 Posted April 1, 2009 Share Posted April 1, 2009 Some news about Abitibi: http://www.bloomberg.com/apps/news?pid=20601082&sid=atM7AKT5LJzU&refer=canada Link to comment Share on other sites More sharing options...
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