They are still on track for over 900 million in free cash flow. A 9% yield at current share price. Not bad considering the company's operational performance. Turn it around with new management and use some leverage at rates far below 9% and I think there is great potential here. Why is there little interest?
At 18 market cap is about 12B. Finance 70% at 6% is about 500m. That nets about 400m assuming FCF of 900m. 400m/3.6B is about 11%. The alternative is buy 10yr treasuries and get 2.6%. Just my optimistic opinion!
Last January they were able to get 2.75% on their 2018 notes and 4.375% on their 2023 notes. FCF in excess of 900m is nearly 10% at current market cap. I think this is a great LBO candidate. If private equity could get money at 6% to finance 70% could this be a great deal???