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Global Geophysical Services, Inc. Message Board

  • rosen62 rosen62 Dec 4, 2013 10:32 AM Flag

    Non convertible perpetual preferred.

    This financing puts equity at risk by lowering its status one notch. Or a couple. The fact that they are not convertible means they will never be part of equity (common). They are also cumulative. Therefore if the company ever stops paying them out the dividends will accrue. Finally, perpetual means their redemption claims are forever, including non-paid dividends. The company is placing a roadblock in the capital structure weakening common shares.

    This is not a friendly deal for common stock and whoever is behind it (bankers, etc.) that will acquire these shares seeks to make a statement (much further protection) against common shares.

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    • hey, this can keep their jobs longer, buy them more time, if you are an equity holder you have more time to realize it and get out.

      It is very simple, the company just has too much debt. this will keep management their jobs and keep the company afloat but you are 100% correct,, this is terrible for equity holders.

      What kind of rate can they get on this, I thought the Srs yielding something like 18%, and the credit facility is what 10.75 with collateral over all the assets?

      So these preferred wil be behind the Srs, how are they going to get any fool to buy them at a lower rate than 17% ?

      Common equity is doomed.