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Hughes Electronics Corp. (GMH) Message Board

  • montyhigh montyhigh Mar 18, 2003 1:14 PM Flag

    Dead Board

    DTV LA announcy chapter 11 and nobody has anything to say?

    Monty

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    • Monty: I normally receive all news on Hughes and have not heard anything on chapter 11, LA

    • I think the DTV LA bankruptcy is just one more chapter in GM's quest to tidy up loose ends preventing them from dumping Hughes like a hot rock to remedy their pension woes...

      DTVs $1.5 billion debt vs. .5 billion assets was a huge liability on the books for potential Hughes buyers.

      Looks to me like other things that might hold up potential deals have been taken care of one by one at an amazingly rapid rate (for GM) over the last month or so:

      * settled $32M China suit with Govt.
      * issued $3B in bonds/credit lines against DTV (retiring old Hughes debt owed to GM & giving GM the cash from the bond sale). This tactic in essence raises the price of DTV by $3B, but doesn't require the buyer to immediately come up with the $3B at time of sale, since the debt was raised in the market & now resides in DTV books as new debt, to be assumed by the buyer.
      * contributed 10% GMH stock to GM pension fund so tax implications of sale of GMH stock become moot.
      * Panamsat seeking buyout offers, to take it out of play in a GMH sale (hence lowering the price of Hughes/DTV).
      * Increased shelf registration to $10B from $5B, a "hurry up" sign to potential buyers, showing they'll squeeze another $10B out of GMH one way or another...

      Murdoch/Malone have also been making moves to gather cash (see today's news re: BSkyB). Maybe they won't bid together, but might try to carve up the GMH pie among themselves?

      Looks to me like things are coming to a boil...
      (haven't we heard that before though!). There are now enough bidders to make things interesting...

    • What's to say? DTV is dead in the water until GM gets off its ass.I don't know what is good for this company. I do however believe in the product and hope a high quality management team can get this horse going.Charlie is a bad ass compeditor and I know a bunch of burracrats can't compete with him.