massive wall being built, page-45

The following two things seem very illogical to me.

a) management would agree to a sweep of $50 million which prevents repayment of higher amounts as they fall due which we would otherwise have the cash for

b) that the banks would enforce this

The entire point of the sweep was to have a form of pseudo administration, in which the company was still well and truly alive, but the lenders were able to control when they would receive their money back.

If we have $50 million sitting in cash and slight payments being made under the sweep, then along comes the £85 million debt and we are therefore unable to pay it off, what do the banks gain by forcing us into administration?

That simply enters them into a long, drawn out process, with bargain basement prices for all the assets, so it will take longer for them to get less money back, doesn't really make much sense does it?

Doesn't mean that we're safe by any means, just fail to see why any bank in their right mind would do that. They already have the power, they already receive massive interest, surely they have more to lose than gain?

Management could've said sorry, no thanks, shove your sweep where the sun don't shine, we're meeting all interest payments and not breaching any covenants, so we'll just keep on doing so.

But for some reason, they agreed, surely there must be some form of benefit in return. The banks were not in the position of power they are now, so what did they give us in exchange?

Am not in any way trying to say we're safe, it just doesn't make sense to me, so as many people here have said it's the unknown which could bring us down. Surely it would be mutually beneficial for everyone involved to allow some flexibility.