afgha questions and things to ponder., page-20

Let's look at the situation objectively:

1. AFG has shown capacity to reduce debt in a difficult situation... 2/3 of their target achieved.
2. The market conditions are extraordinary. The banks can't do any better in any case
3. Banks are flush with deposit cash -- as such they are in no hurry to raise money by selling assets of those owing them money
4. It is patently clear that given an extension an amicable outcome can be reached, and banks can be assured interest AND principal for the mdeium term by working with Allco
5. Look at CNP -- They have had numerous extensions where we are talking billions. This is despite their management's incompetence in offloading ANYTHING.
6. The repayment schedule, was in my opinion, set too aggressive. If the target is $400 million in debt by Sept '09, then why is the target by year's end this year $500m?? Why leave 9 months for paying off a mere $100 mil? I beelive this is because the banks never EXPECTED this situation, because if they did they would have made the terms of the repayment more flexible -- as such they are surprised just like Allco by the market's deterioration.
7. And finally, if the banks were going to say no, would they not have already done so? I believe the delay is due to deals being done behind the scene until the last minute -- ie penalty negotiations etc. Allco are a sly bunch and they are sounding the alarm bell as they are as a negotiating ploy in my opinion.

Thanks,