Synlait have done this before but only seem to dig themselves deeper into the hole.
Banker debt was NZ$244. So do they get enough bonds to clear bank debt. (Wasn't that what the last bond issue was for?)
Add in another Nz$180m for subordinated unsecured bonds. But if you create bonds to pay off bonds at what point have you created a ponzi? And why would you create new bonds to pay these people off?
On Tuesday Synlait will announce a loss. So how are they ever going to create enough profit to pay back bonds. Dairyworks clearly isn't selling and Talbot is worth nothing.
Why go down the redeemable route?
SM1 Price at posting:
67.5¢ Sentiment: Sell Disclosure: Not Held
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