Devander,I guess my point is that they have Hobson's Choice.Yes,...

Devander,

I guess my point is that they have Hobson's Choice.

Yes, they could raise equity, but what good would that do? When your debt is 3 times your market cap, how many shares do you have to issue to make a difference? If you are an existing shareholder, it means that your already pulverized holding gets diluted into aether.

If they just raise, say, double their market cap, or $225m, and use it to pay down debt, that's all well and good, but it still means that they have $360m due if/when they breach their debt convenant (with a further $200m due later) and, in the meantime, they have halved existing shareholders' value by doubling shares on issue, without removing the overall threat: too much debt and debt well in excess of market cap.

I have never seen a company successfully raise more than its market cap (except for penny dreadfuls), when all they are doing is using the newly raised capital to pay off part of an old debt.

Why would new equity holders put hundreds of millions into an enterprise, just so a bunch of bankers could take their cash straight out the other end?

That's just not going to happen. So, forget new equity. The only game in town is the bankers agreeing to refinance.