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Aéropostale, Inc Message Board

  • laudasova laudasova Mar 27, 2014 11:53 AM Flag

    ARO and Sycamore

    The first item of business for Sycamore will be for Johnson to resign. The will give an immediate boost to the sentiment as the new CEO will not be Johnson. Second, the idea that Sycamore is setting up ARO for bankruptcy is not likely. The cost and timing of bankruptcy (they are currently second in line in terms of financing) would be far greater than buying the company outright as it stands now. In other words, Sycamore's interests are aligned to help the company succeed. They have a long-term supplier contract, own approximately 12% in the company and have a $150m loan with a blended 6.7% interest rate. All of these items point towards Sycamore helping, or at least trying to help, ARO succeed in the long-term.

    The short-term is another story. The next three months will, of course, be very choppy, as the only good news will be Johnson retiring, which may not be announced until a successor is found.

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