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School Specialty Inc. Message Board

  • alicepinecone alicepinecone Jan 30, 2013 10:23 AM Flag

    What's the noise?

    After the Court date SCHS should be at least $.50. Here's why. SCHS (1) is selling assets, not going out of business, (2) Canadian operations is not in bankruptcy, (3) Bayside is supplying "debtor in possession" financing of $50 million that will convertible, in part, into equity, (4) Company engaged Perella Weinberg late last year as financial adviser, which is a top line investment banker with over $9 billion in commitments that committed to preserve shareholders equity, (5) Bank of New York is an unsecured creditor with $158 million at 3.75% due in 2026, which means they have not leverage but to accept an equity interest. Finally SCHS had sales of $732 million in fiscal 2012 and sanctioned to conduct business in the educational markets. Its licenses are a valuable intangible and would be lost if the company's is liquidated, which is not management's intent. All in all, SCHS is a safe play to continue as a going and profitable concern with its current shareholders being preserved, and the material dilution would still warrant at $1.50 share to the existing equity holders.

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