I'm afraid that you don't understand lenders.
They want their principal back, plus interest, and not equity which carries risk (even in a re-organized firm). So, if it takes a little cooperation with DRYS, such as extending maturity, they'll do so.
ORIG is not cash.
It's an asset that DRYS (and the judge) may deem essential and/or strategic to its viability. Currently, ORIG provides essential cash flow AND book value to collateralize debt, allowing DRYS leverage to re-negotiate its debt (e.g., push out maturity, and possibly lower interest rate given recovering valuations of various assets and cash flow)
Bear in mind that the purpose of Chp 11 is for the debtor to reorganize in a credible and viable manner----no one, including other creditors, want to re-enter Chp 11 or ultimately fail, if at all preventable through a reasonable (and, sometimes, unreasonable via cram down) plan of reorganization.
"what a moron... you still honestly think a company who has assets worth more then debt can file bankrupt?"
Absolutely, and not uncommon.
Firms service and pay off debt at maturity with cash (unless it's convertible debt). If it doesn't have the cash, it defaults and seeks Chp 11 protection. It's quite possible to be asset rich (e.g., plant, properties, inventory, etc.) but with little cash and cash flow. Companies whose book values are heavy in intangible assets (e.g, goodwill, deferred tax assets, even patents) can be especially problematic.
Further assist to JCP's recovery--from today's WSJ:
"Apple Inc. and at least a dozen other companies have started borrowing short-term cash at the fastest pace in almost two years, telegraphing economic growth.
Last month, companies with the highest credit ratings sold an average of $5.88 billion of commercial paper a day, according to the Federal Reserve. For the first time in about two decades, corporate commercial paper accounts for a quarter of the market, with banks and insurers making up the rest. Companies are issuing more commercial paper to finance expenses such as growing payrolls, capital spending and mergers and acquisitions, said John Lonski, chief economist at Moody's MCO -0.42% Capital Markets Research Group."
“Companies are more optimistic, more confident,” he said. “There is a correlation between what happens with private-sector payrolls and commercial paper.”"
Recovering BDI index (bulk shipping) was mentioned by another poster yesterday as another positive (leading) economic indicator.
Stitch all the data points together and you develop an increasingly positive view of JCP's chances.
Coal IS cheap on a direct cost basis, no question. It's much more expensive when you factor in waste disposal, human and environmental costs.
It would be nice to clean it up, but large scale solutions simply are not on the horizon despite decades of R&D. That's why coal plants are being deactivated systematically.
China is a really compelling case. Visit major metros such as Shanghai and the capital, Beijing--you can't breathe because of coal smog. It's serious enough, an epidemiological and environmental crisis, that clean energy has become a strategic national planning initiative despite the huge short/medium tern costs/investments.
Coal and ng consumption BOTH increase during summer months to meet electricity demand. It's the annual trends that are most telling and matter.
Coal is simply far too dirty and problematic--even the residual ash is huge disposal/toxic headache as the huge river spill a few years ago demonstrate. It's short tern cheap--a narcotic that distracts from good long term planning.
The new regs most definitely will gain traction with time. There are global trends afoot==China's recent multi-decade supply deal with Russia is one sign.
Though the financials are horrible, the business itself is pretty simple at this point--focus on fundamentals.
Ullman made a remark during a cc late last year something to the effect: "We've got 30 problems, but they're all fixable."
This, for me, sums up JCP's present situation. I do believe that, perhaps in 1-2 years, Ullman will need to bring in a replacement who can really run JCP for the long haul--vision and tight handle on operations.
I'd like to hear your woman's point of view of why JCP is a good investment given the competitive retail industry.
The HRB project is certainly "complicated" because of the integration of multiple parties from upstream to downstream customers (ie, long term supply commitments) essential for the multiple $Billions in capital commitments.
Why do you think that TG wants/need an ownership stake in the terminal?
And, why do you think K Suthanthiran is the sticking point in the entire supply chain?
I, too, believe this deal will get done; and, recent trends might help move it along--ie, firming NG prices, clean air regulations, environmental concerns in China/Japan, etc.
NG is a strategic asset.
What is your outlook on natural gas--supply vs demand, and pricing trends going forward?
Yes, I've noticed the trend.
But, what determines JCP's ability to refi to push out maturites with new lenders?
You're correct about secured creditors.
I took liberties in simplifying, this mb is populated with too much ignorance---ie, those who blindly insist of BK.
My basic simple point: bonds precede equity in the capital structure, and when bonds of a distressed company recover, it's a positive sign of improvements that benefit equity.