TheBramble
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It must have been quite a switch from TA, charts and datafeeds to what is not just fundamentals, but almost pure business value analysis.
A very interesting perspective.
Do you still find anything of interest on these boards as the massive majority of it relates to trading from your 'old world' view?
Are you running (or planning to run) your managed funds on the investment model you outline above or a mixture of that and TA?
A very interesting perspective.
Do you still find anything of interest on these boards as the massive majority of it relates to trading from your 'old world' view?
Are you running (or planning to run) your managed funds on the investment model you outline above or a mixture of that and TA?
Tony,
Yes it was quite a switch. Well worth the time and effort however.
As to finding anything of interest on these boards, absolutely. The technical approach has a large institutional following, in addition to an unquantifiable retail following. It therefore provides much information from a "Market risk" perspective.
As sentiment plays a huge role in the market, it is nice to gauge what the volatile sector is thinking, as even greater value may be just around the corner. Timing can improve value as well.
I run my small fund based on fundamentals, but as detailed, I will "use" technicals, not as a buy/sell tool, just a tool to gauge market sentiment.
cheers Grant
Yes it was quite a switch. Well worth the time and effort however.
As to finding anything of interest on these boards, absolutely. The technical approach has a large institutional following, in addition to an unquantifiable retail following. It therefore provides much information from a "Market risk" perspective.
As sentiment plays a huge role in the market, it is nice to gauge what the volatile sector is thinking, as even greater value may be just around the corner. Timing can improve value as well.
I run my small fund based on fundamentals, but as detailed, I will "use" technicals, not as a buy/sell tool, just a tool to gauge market sentiment.
cheers Grant
roguetrader
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d998
Interesting area of finance, I should imagine it is not a well trodden route by the average investor. How did you become interested in this.
Interesting area of finance, I should imagine it is not a well trodden route by the average investor. How did you become interested in this.
Rogue,
I think once upon a time, when the information was much more difficult to come by, it was a highly specialised area, with very little competition.
Now, although not the purview of the average retail trader/investor, the competition is without a doubt keener than it once was..........
I became involved purely from my investigation of fundamentals. I was looking for a strategy that had a high expectancy, that you could take (for myself) a large position in. As I said to Paul, this is one of 4 strategies that I employ.
Cheers d998
I think once upon a time, when the information was much more difficult to come by, it was a highly specialised area, with very little competition.
Now, although not the purview of the average retail trader/investor, the competition is without a doubt keener than it once was..........
I became involved purely from my investigation of fundamentals. I was looking for a strategy that had a high expectancy, that you could take (for myself) a large position in. As I said to Paul, this is one of 4 strategies that I employ.
Cheers d998
This is in response to a message that I received. The context is in regard to the "Judge" will give you the outcome.
If we first establish a timeline, and the people involved, and the possible circumstances.
Involved Parties;
Management, Analysts, SEC, Security holders, Banks
Circumstances;
Company XYZ, has financial difficulties,
These difficulties come to light in one of several ways; Management volunteer the information, Analysts discover discrepancies and start downgrades, SEC, investigates, orders restatements, restatements disclose technical bankruptcy.
Company XYZ misses interest payments on funded debt, due to clauses in the indenture, the creditors force bankruptcy proceedings, and trustees appointed.
Voluntary liquidation, and assets are liquidated, with proceeds being returned to security holders as assets are converted to cash.
Assuming for a moment that the strategy is to "SHORT" a "STOCK" that is a bankruptcy candidate, what elements must be present to make this viable?
1...The successful candidate must have as a likely outcome the extinguishment of the common.
2...That you can still borrow the stock to short
3...That it will not be called on any retracements, or prior to closing your position
4...That any dividend payments have been suspended
5...That you take your position with plenty of downside potential available. This is important because should the company go to liquidation, and you have sold short below realizable net assets, you will be squeezed as "value vultures" start buying. In a restructuring, you would probably be ok, but it could be hairy.
Now, to fulfil the above criteria, XYZ, with financial difficulties, downgraded, investigated, and found to fraudulent, MIGHT be a candidate, a current example could be Fannie Mae. However, would you short Fannie? I know I wouldn't.
Why?
Due to the scale and size of Fannie, could the government let Fannie fail? Who knows? And unless you do know, stay away.
My strategy is not to be a short seller, but a BUYER of undervaled assets, that will be liquidated, and I get paid, or restructured, so that the undervaluation becomes re-valued to true value, and I then sell for my profit.
My comments regarding the Judge are in reference to the plan submitted by the Trustees as to the most equitable route to proceed down. The Judge will either accept the plan or order revisions. Eventually all is resolved. The key is to value accurately the assets, buy at a discount, and let nature take its course.
How easy is it to get assets at a discount? Not that difficult. Why? Because if you look at a stock like e-bay, missed an earnings call, sold of by $18 odd/share, what happens when a company calls for Chap11/7/10 protection? The selloff is huge, assets drop to pennies in the dollar.........people like myself who understand the process, step in and are buyers, because we are informed buyers, who know what we are buying, as opposed to sellers who have a deep rooted aversion to bankruptcy, and to be fair are showing bad paper losses.
If I offered you a brand new Porshe for $5000, today only, take it or leave it, and you had the cash in your pocket..........what would you do?
This is in essence what I do..............recognition is the key.
cheers d998
If we first establish a timeline, and the people involved, and the possible circumstances.
Involved Parties;
Management, Analysts, SEC, Security holders, Banks
Circumstances;
Company XYZ, has financial difficulties,
These difficulties come to light in one of several ways; Management volunteer the information, Analysts discover discrepancies and start downgrades, SEC, investigates, orders restatements, restatements disclose technical bankruptcy.
Company XYZ misses interest payments on funded debt, due to clauses in the indenture, the creditors force bankruptcy proceedings, and trustees appointed.
Voluntary liquidation, and assets are liquidated, with proceeds being returned to security holders as assets are converted to cash.
Assuming for a moment that the strategy is to "SHORT" a "STOCK" that is a bankruptcy candidate, what elements must be present to make this viable?
1...The successful candidate must have as a likely outcome the extinguishment of the common.
2...That you can still borrow the stock to short
3...That it will not be called on any retracements, or prior to closing your position
4...That any dividend payments have been suspended
5...That you take your position with plenty of downside potential available. This is important because should the company go to liquidation, and you have sold short below realizable net assets, you will be squeezed as "value vultures" start buying. In a restructuring, you would probably be ok, but it could be hairy.
Now, to fulfil the above criteria, XYZ, with financial difficulties, downgraded, investigated, and found to fraudulent, MIGHT be a candidate, a current example could be Fannie Mae. However, would you short Fannie? I know I wouldn't.
Why?
Due to the scale and size of Fannie, could the government let Fannie fail? Who knows? And unless you do know, stay away.
My strategy is not to be a short seller, but a BUYER of undervaled assets, that will be liquidated, and I get paid, or restructured, so that the undervaluation becomes re-valued to true value, and I then sell for my profit.
My comments regarding the Judge are in reference to the plan submitted by the Trustees as to the most equitable route to proceed down. The Judge will either accept the plan or order revisions. Eventually all is resolved. The key is to value accurately the assets, buy at a discount, and let nature take its course.
How easy is it to get assets at a discount? Not that difficult. Why? Because if you look at a stock like e-bay, missed an earnings call, sold of by $18 odd/share, what happens when a company calls for Chap11/7/10 protection? The selloff is huge, assets drop to pennies in the dollar.........people like myself who understand the process, step in and are buyers, because we are informed buyers, who know what we are buying, as opposed to sellers who have a deep rooted aversion to bankruptcy, and to be fair are showing bad paper losses.
If I offered you a brand new Porshe for $5000, today only, take it or leave it, and you had the cash in your pocket..........what would you do?
This is in essence what I do..............recognition is the key.
cheers d998
Ducati,
I understand the principles of what you do but the technicalities would take me a while to be comfortable with.
Without realising it, this is just what I have done in the odd instance with odd bits of kit.
If I had realised how complicated the area was I'd have stayed clear.
It appears to me that this is one of those areas where perspiration is all but inspiration is nothing and is therefore a much more reliable way to earn a crust.
Please correct me if I am wrong.
I understand the principles of what you do but the technicalities would take me a while to be comfortable with.
Without realising it, this is just what I have done in the odd instance with odd bits of kit.
If I had realised how complicated the area was I'd have stayed clear.
It appears to me that this is one of those areas where perspiration is all but inspiration is nothing and is therefore a much more reliable way to earn a crust.
Please correct me if I am wrong.
roguetrader
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ducati998 said:
d998,
What is it that you actually buy, and at what point. If we take K-Mart as an example, since I seem to remember it was a company, then it wasn't and now it is,
Do you buy the ailing stock as it langishes at .50c per share, or buy something other than stock. As an intra-day trader obviously I don't come up against this sort of thing, I always imagined if say you owned K-Mart when it's stock had fallen to very little and held on to it your shares would simply vanish or cease to exist as it went through its resurrectionRogue,
Regarding KMART, here is the basic story of what happened. Kmart was bought by E.Lampert, and M. Whitman colluded in the deal. Whitman is a pure vulture, Lampert is possibly the next Buffett.
The key to his ambitions, though, is a 53% stake in Kmart Holding Corp. (NasdaqNM:KMRT - News). If a fading textile maker in New Bedford, Mass., called Berkshire Hathaway Inc. (NYSE:BRKb - News) provided the launchpad for Buffett, then Kmart might do the same for Lampert. Much like the textile mill when Buffett got hold of it, the once-bankrupt Kmart is now throwing off far more cash -- it has $3 billion on hand -- than it can use in the business. It also has $3.8 billion in accumulated tax credits, which can offset taxes on future income, and a fast-rising stock that is valuable in deal-making. Those advantages make Kmart a perfect vehicle for bankrolling big acquisitions. They give Lampert "the ability to buy a lot of companies and shield a lot of income from taxes," says John C. Phelan, a former ESL principal who is now managing partner of MSD Capital, which also manages Dell family money.
In an echo of that move, Kmart disclosed in August that the board had given Lampert authority to invest Kmart's "surplus cash" in other businesses. Wall Street is reading that move as a signal that Kmart may be on the way to becoming Lampert's Berkshire Hathaway. "There is no question he will turn Kmart into an investment vehicle like Warren Buffett's," says legendary value investor Martin Whitman. He runs Third Avenue Management LLC, which teamed up with Lampert when Kmart was in bankruptcy court and now owns a 4.6% stake in the retailer. "That's what I am valuing into the stock."
Kmart is a classic example of how Lampert works. He got control of a $23 billion retail chain -- the nation's third-largest discounter, behind Wal-Mart Stores Inc. (NYSE:WMT - News) and Target Corp. (NYSE:TGT - News) -- for less than $1 billion in bankruptcy court. He emerged as the largest shareholder and became chairman 18 months ago as part of a reorganization in which virtually all of its debt was converted into shares. Lampert's goal is to keep Kmart humming so it can continue throwing off cash. Even if Kmart eventually fails, keeping it going as long as possible lets him extract top dollar for its valuable real estate by selling the stores over time. "We are going to have to generate traffic (in the stores)," says investor Whitman. "Even to this day, it is no slam dunk."
So far, Lampert has been milking Kmart for cash. Although same-store sales continue to sink, the company has been in the black for the past three quarters because cash flow has surged. A favorite Lampert gripe: Retailers are too willing to chase unprofitable sales. Instead, he has imposed a program of keeping the lid on capital spending, holding inventory down, and stopping the endless clearance sales. And he pushed for Kmart to sell 68 stores to Home Depot Inc. (NYSE:HD - News) and Sears to raise a total of $846.9 million. That's nearly as much as the $879 million value placed on all of Kmart's real estate -- 1,513 stores, 16 distribution centers, and the fixtures -- in bankruptcy proceedings. Thanks to the measures Lampert has put in place, says ubs analyst Gary Balter, Kmart could have as much as $4.2 billion of cash in hand by the end of next year's first quarter.
Lampert is also angling to boost profits at a smaller, more focused Kmart. He has quietly consulted former Gap Inc. (NYSE:GPI - News) Chief Executive Millard Drexler on apparel strategy and hired two former Gap merchandising and design executives as a result. One of their first moves was to add four upmarket brands to Kmart's clothing lineup, which will widen margins. And Kmart is beefing up its consumer electronics selection, adding such brands as Sony. Lampert has also retained the architectural firm Pompei A.D. LLC, which designs interiors for teen retailer Urban Outfitters Inc. (NasdaqNM:URBN - News), to start testing a much-needed redesign of Kmart's stodgy outlets. And on Oct. 18 he named a new CEO, Aylwin Lewis, a PepsiCo Inc. (NYSEEP - News) veteran who's expected to sharpen the chain's operations and marketing. Even before that move, Kmart resumed TV advertising and for the first time ran apparel ads in Vogue and Vanity Fair in a bid to outdo rival Target and present a hipper image.
cheers d998
Regarding KMART, here is the basic story of what happened. Kmart was bought by E.Lampert, and M. Whitman colluded in the deal. Whitman is a pure vulture, Lampert is possibly the next Buffett.
The key to his ambitions, though, is a 53% stake in Kmart Holding Corp. (NasdaqNM:KMRT - News). If a fading textile maker in New Bedford, Mass., called Berkshire Hathaway Inc. (NYSE:BRKb - News) provided the launchpad for Buffett, then Kmart might do the same for Lampert. Much like the textile mill when Buffett got hold of it, the once-bankrupt Kmart is now throwing off far more cash -- it has $3 billion on hand -- than it can use in the business. It also has $3.8 billion in accumulated tax credits, which can offset taxes on future income, and a fast-rising stock that is valuable in deal-making. Those advantages make Kmart a perfect vehicle for bankrolling big acquisitions. They give Lampert "the ability to buy a lot of companies and shield a lot of income from taxes," says John C. Phelan, a former ESL principal who is now managing partner of MSD Capital, which also manages Dell family money.
In an echo of that move, Kmart disclosed in August that the board had given Lampert authority to invest Kmart's "surplus cash" in other businesses. Wall Street is reading that move as a signal that Kmart may be on the way to becoming Lampert's Berkshire Hathaway. "There is no question he will turn Kmart into an investment vehicle like Warren Buffett's," says legendary value investor Martin Whitman. He runs Third Avenue Management LLC, which teamed up with Lampert when Kmart was in bankruptcy court and now owns a 4.6% stake in the retailer. "That's what I am valuing into the stock."
Kmart is a classic example of how Lampert works. He got control of a $23 billion retail chain -- the nation's third-largest discounter, behind Wal-Mart Stores Inc. (NYSE:WMT - News) and Target Corp. (NYSE:TGT - News) -- for less than $1 billion in bankruptcy court. He emerged as the largest shareholder and became chairman 18 months ago as part of a reorganization in which virtually all of its debt was converted into shares. Lampert's goal is to keep Kmart humming so it can continue throwing off cash. Even if Kmart eventually fails, keeping it going as long as possible lets him extract top dollar for its valuable real estate by selling the stores over time. "We are going to have to generate traffic (in the stores)," says investor Whitman. "Even to this day, it is no slam dunk."
So far, Lampert has been milking Kmart for cash. Although same-store sales continue to sink, the company has been in the black for the past three quarters because cash flow has surged. A favorite Lampert gripe: Retailers are too willing to chase unprofitable sales. Instead, he has imposed a program of keeping the lid on capital spending, holding inventory down, and stopping the endless clearance sales. And he pushed for Kmart to sell 68 stores to Home Depot Inc. (NYSE:HD - News) and Sears to raise a total of $846.9 million. That's nearly as much as the $879 million value placed on all of Kmart's real estate -- 1,513 stores, 16 distribution centers, and the fixtures -- in bankruptcy proceedings. Thanks to the measures Lampert has put in place, says ubs analyst Gary Balter, Kmart could have as much as $4.2 billion of cash in hand by the end of next year's first quarter.
Lampert is also angling to boost profits at a smaller, more focused Kmart. He has quietly consulted former Gap Inc. (NYSE:GPI - News) Chief Executive Millard Drexler on apparel strategy and hired two former Gap merchandising and design executives as a result. One of their first moves was to add four upmarket brands to Kmart's clothing lineup, which will widen margins. And Kmart is beefing up its consumer electronics selection, adding such brands as Sony. Lampert has also retained the architectural firm Pompei A.D. LLC, which designs interiors for teen retailer Urban Outfitters Inc. (NasdaqNM:URBN - News), to start testing a much-needed redesign of Kmart's stodgy outlets. And on Oct. 18 he named a new CEO, Aylwin Lewis, a PepsiCo Inc. (NYSE
EP - News) veteran who's expected to sharpen the chain's operations and marketing. Even before that move, Kmart resumed TV advertising and for the first time ran apparel ads in Vogue and Vanity Fair in a bid to outdo rival Target and present a hipper image.cheers d998
And a current example has just come via private message,
BATON ROUGE, LOUISIANA (February 13, 2004) -- Piccadilly Cafeterias, Inc. announced that it has agreed to sell its assets and ongoing business operations to Piccadilly Investments LLC, for a cash sale price of $80 million.
The agreement is the culmination of a Section 363 bankruptcy sale process that concluded with an auction on Wednesday, February 11. The transaction, approved by Piccadilly's Board of Directors and the presiding bankruptcy judge, Raymond B. Ray, is expected to close by mid-March.
Vince Colistra, Piccadilly's Chief Restructuring Advisor and the Managing Director from Phoenix Management Services, said, "We are very pleased with the outcome of the bankruptcy auction, because it resulted in a significant increase from the $54 million initial offer we announced when the company filed for bankruptcy last year."
In addition to a voluntary chapter 11 filing, the 2003 agreement also called for Piccadilly to continue soliciting proposals from other interested parties. It was during this time that the newly formed Piccadilly Investments LLC submitted a qualifying offer of $55.8 million, resulting in a very competitive bankruptcy auction, bumping the price up to $80 million, which was $1 million higher than the preceding competing bid of $79 million.
Piccadilly Investments LLC is an acquisition company jointly owned by The Yucaipa Companies and Diversified Investment Management Group, two Los Angeles-based private equity firms. "We are excited to be acquiring Piccadilly with its long and proud tradition. It has a tremendous brand name with significant growth potential," said Ron Burkle, Managing Partner of The Yucaipa Companies.
According to its own press release, Yucaipa brings its strategic, financial and operational expertise to the companies it owns. Yucaipa has stated that its investment will provide Piccadilly with the resources to remodel, replace and revitalize existing cafeterias and expand into new locations. Yucaipa also looks forward to working with local communities and redevelopment agencies across the geographic area in which Piccadilly operates, according to the company's statement.
Jack McGregor, the acting Chief Executive Officer of Piccadilly, said the purchase "is excellent news for our loyal team members and guests," and noted that the buyer has "indicated its intention to retain Piccadilly's corporate headquarters in Baton Rouge."
Even after paying the customary break-up fee to Piccadilly's initial prospective buyer, the enhanced purchase price will allow Piccadilly to fully retire its outstanding bank debt and senior notes, and leave a substantial amount for pro rata distribution to its unsecured creditors. Unfortunately, no monies will be available for distribution to common stockholders, according to McGregor.
" Going forward, Piccadilly will have standing behind it the substantial financial resources of a highly sophisticated private equity group. We are very grateful to our guests, our team members and our board," said McGregor, "for their loyalty during these past several months."
Ok, lets examine this in a logical sequence;
The Board of Directors, in this instance are the "TRUSTEES", this is usually the case, but not always. They have formulated a plan that basically auctioned off the assets to the highest bidder, this plans outcome will now need to be ratified by the Judge, and if passed the sale will be complete.
Here is the nitty gritty. The creditors always must by law be paid first. Liabilities are liabilities and must always be discharged.
In order of repayment,
Bank debt,
Senior notes, unsecured short-term (less than 1 year) debt
Unsecured creditors, possibly funded debt, or trade debt (suppliers)
All the above will be paid, as the value of the assets, must have been worth circa $55 - $80M, as this has been paid by auction. This in effect is an unusual liquidation. The new owners, feel that the business is viable.
The holders of the COMMON, viz., the shareholders have lost their entire stake as the assets value only just covered the liabilities.
How to make money from this?
When the Company went into receivership, the "DEBT" sold off hard, this is what you buy, the debt, after calculating what asset value there is to cover the debt. If there is not enough, or some doubt, stay well away.
Of great pertinance is the Trustees plan to the Courts. This was a plan to AUCTION to the highest bidder. This should also be avoided, unless you plan to buy the whole deal. Auctions by definition can only ever command the 2'nd highest price, you want the highest price by negotiation, as your calculations are based on individual assets.
cheers d998
BATON ROUGE, LOUISIANA (February 13, 2004) -- Piccadilly Cafeterias, Inc. announced that it has agreed to sell its assets and ongoing business operations to Piccadilly Investments LLC, for a cash sale price of $80 million.
The agreement is the culmination of a Section 363 bankruptcy sale process that concluded with an auction on Wednesday, February 11. The transaction, approved by Piccadilly's Board of Directors and the presiding bankruptcy judge, Raymond B. Ray, is expected to close by mid-March.
Vince Colistra, Piccadilly's Chief Restructuring Advisor and the Managing Director from Phoenix Management Services, said, "We are very pleased with the outcome of the bankruptcy auction, because it resulted in a significant increase from the $54 million initial offer we announced when the company filed for bankruptcy last year."
In addition to a voluntary chapter 11 filing, the 2003 agreement also called for Piccadilly to continue soliciting proposals from other interested parties. It was during this time that the newly formed Piccadilly Investments LLC submitted a qualifying offer of $55.8 million, resulting in a very competitive bankruptcy auction, bumping the price up to $80 million, which was $1 million higher than the preceding competing bid of $79 million.
Piccadilly Investments LLC is an acquisition company jointly owned by The Yucaipa Companies and Diversified Investment Management Group, two Los Angeles-based private equity firms. "We are excited to be acquiring Piccadilly with its long and proud tradition. It has a tremendous brand name with significant growth potential," said Ron Burkle, Managing Partner of The Yucaipa Companies.
According to its own press release, Yucaipa brings its strategic, financial and operational expertise to the companies it owns. Yucaipa has stated that its investment will provide Piccadilly with the resources to remodel, replace and revitalize existing cafeterias and expand into new locations. Yucaipa also looks forward to working with local communities and redevelopment agencies across the geographic area in which Piccadilly operates, according to the company's statement.
Jack McGregor, the acting Chief Executive Officer of Piccadilly, said the purchase "is excellent news for our loyal team members and guests," and noted that the buyer has "indicated its intention to retain Piccadilly's corporate headquarters in Baton Rouge."
Even after paying the customary break-up fee to Piccadilly's initial prospective buyer, the enhanced purchase price will allow Piccadilly to fully retire its outstanding bank debt and senior notes, and leave a substantial amount for pro rata distribution to its unsecured creditors. Unfortunately, no monies will be available for distribution to common stockholders, according to McGregor.
" Going forward, Piccadilly will have standing behind it the substantial financial resources of a highly sophisticated private equity group. We are very grateful to our guests, our team members and our board," said McGregor, "for their loyalty during these past several months."
Ok, lets examine this in a logical sequence;
The Board of Directors, in this instance are the "TRUSTEES", this is usually the case, but not always. They have formulated a plan that basically auctioned off the assets to the highest bidder, this plans outcome will now need to be ratified by the Judge, and if passed the sale will be complete.
Here is the nitty gritty. The creditors always must by law be paid first. Liabilities are liabilities and must always be discharged.
In order of repayment,
Bank debt,
Senior notes, unsecured short-term (less than 1 year) debt
Unsecured creditors, possibly funded debt, or trade debt (suppliers)
All the above will be paid, as the value of the assets, must have been worth circa $55 - $80M, as this has been paid by auction. This in effect is an unusual liquidation. The new owners, feel that the business is viable.
The holders of the COMMON, viz., the shareholders have lost their entire stake as the assets value only just covered the liabilities.
How to make money from this?
When the Company went into receivership, the "DEBT" sold off hard, this is what you buy, the debt, after calculating what asset value there is to cover the debt. If there is not enough, or some doubt, stay well away.
Of great pertinance is the Trustees plan to the Courts. This was a plan to AUCTION to the highest bidder. This should also be avoided, unless you plan to buy the whole deal. Auctions by definition can only ever command the 2'nd highest price, you want the highest price by negotiation, as your calculations are based on individual assets.
cheers d998
Tower Automotive, Inc. to File Chapter 11; Lines Up $725 Million of DIP Financing-WSJ
February 02, 2005
The Wall Street Journal reported that Tower Automotive, Inc. plans to seek Chapter 11 bankruptcy-court protection. Tower's Board authorized the filing after unsuccessful negotiations with some holders of $1.7 billion of the Company's debt. Currently, the Company has about $630 million in bank debt and about $835 million of unsecured bond debt. Tower Automotive intends to use the Chapter 11 process to reduce its debt load and simplify its capital structure under court supervision. The Company said that it has no plans to reduce its labor force during the restructuring. Its international operations in Europe, Asia, Brazil and Canada will not be included in the reorganization. Tower Automotive has lined up about $725 million of debtor-in-possession (DIP) financing from J.P. Morgan Chase & Co. to allow it to continue operating through the bankruptcy process.
February 02, 2005
The Wall Street Journal reported that Tower Automotive, Inc. plans to seek Chapter 11 bankruptcy-court protection. Tower's Board authorized the filing after unsuccessful negotiations with some holders of $1.7 billion of the Company's debt. Currently, the Company has about $630 million in bank debt and about $835 million of unsecured bond debt. Tower Automotive intends to use the Chapter 11 process to reduce its debt load and simplify its capital structure under court supervision. The Company said that it has no plans to reduce its labor force during the restructuring. Its international operations in Europe, Asia, Brazil and Canada will not be included in the reorganization. Tower Automotive has lined up about $725 million of debtor-in-possession (DIP) financing from J.P. Morgan Chase & Co. to allow it to continue operating through the bankruptcy process.
DENVER, Feb. 16 /PRNewswire-FirstCall/ -- Ultimate Electronics, Inc. ULTEQ today announced changes to its management, fourth quarter sales results and the final approval of its $118.5 million DIP financing by the Bankruptcy Court in Wilmington, DE.
The changes in management include the departure of various members of management including David Workman, CEO and President, Neal Bobrick, SVP of Sales and Gerry Demple, SVP of Services. The Board of Directors has appointed Mark Wattles, the Company's Chairman of the Board, to be the Company's CEO. Seven individuals, who have previous experience working with Mr. Wattles, will be joining the Company's management team this week, including the following:
Bill Besselman will be VP of Strategic Planning and Analysis. Mr. Besselman's experience includes five years of consulting at McKinsey & Company, and he was most recently VP of Strategic Planning and Analysis at Hollywood Video.
Lon Weingart will be a consultant to the Company for approximately six months overseeing the operations of the business. Mr. Weingart's experience includes Director of Merchandising and Director of Product Development at Starbucks, VP and SVP of Marketing at Hollywood Video, and most recently SVP of Operations at Hollywood Video.
Jim Marcum, who joined the Company's Board of Directors when Mark Wattles became Chairman, has been asked by the Board to take an active role with respect to the Company's financial operations and restructuring strategy. Mr. Marcum's prior experience includes Treasurer of Melville Corporation, CFO of Marshall's, Vice Chairman and CFO of Stage Stores, CFO of Hollywood Video, and most recently a private investor.
Commenting on the changes, Mark Wattles, Chairman and CEO, said, "I am excited to be working with some of the talent that led Hollywood Video through its successful turnaround. As a result of these changes, Ultimate is now a large Company with management experienced in running a large Company. As a Company, we want to thank David Workman for his partnership with Bill Pearse, our Company's founder, in building a great company and a great brand. Ultimate Electronics and Soundtrack have the best selection of mid to high end audio/video products with a low price guarantee and we are dedicated to being the Ultimate destination for entertainment. Our employees are known for having the best product knowledge in the industry. So, if you want to make sure you are buying the right product for your needs Ultimate and Soundtrack are the places to shop. I am confident with this team in place, not only will Ultimate and Soundtrack be great places to shop but, Ultimately, we will be financially successful as well."
Sales for the quarter ended January 31, 2005 were approximately $195.9 million, a decrease of 19.4 percent from $243.2 million for the same period in the previous year. Comparable store sales were down approximately 19 percent for the quarter ended January 31, 2005. The Company had previously reported comparable store sales for the month of November as down approximately 6 percent and December as down approximately 18 percent. Sales for the year ended January 31, 2005 were approximately $658.3 million, a decrease of 8 percent from $712.9 million for the previous year. Comparable store sales were down approximately 13 percent for the year ended January 31, 2005. In light of the Company's Chapter 11 filing, recent changes in management and the Board, and other financial issues that the Company is currently addressing, the Company is not providing any guidance on its earnings or results of operations. In addition, the reported sales figures in this press release are preliminary and subject to adjustment.
It is not currently possible to predict the length of time the Company will operate under the protection of Chapter 11 and the supervision of the Bankruptcy Court, when the Company will file a plan or plans of reorganization with the Bankruptcy Court, the outcome of the Chapter 11 proceedings in general, or the effect of the proceedings on the business of the Company or on the interest of the various interested parties. Based upon testimony given at the DIP financing hearing on February 14, 2005 by FTI Consulting, it appears unlikely that the outcome of the Company's reorganization will result in any value for the holders of our common stock. The Company does, however, believe that with additional capital, the reorganization will result in an ongoing business that will be good for its customers, creditors and employees.
Commenting on the Company's financial outlook, Mark Wattles, Chairman and CEO, said, "Despite the Company's recent difficulties caused in part by aggressive growth strategies of prior management, I believe that this remains a good business. The reorganization will give us the opportunity to fix the Company's financial and operational structure. I believe the outcome of our reorganization will provide future opportunities for our creditors and our employees."
The changes in management include the departure of various members of management including David Workman, CEO and President, Neal Bobrick, SVP of Sales and Gerry Demple, SVP of Services. The Board of Directors has appointed Mark Wattles, the Company's Chairman of the Board, to be the Company's CEO. Seven individuals, who have previous experience working with Mr. Wattles, will be joining the Company's management team this week, including the following:
Bill Besselman will be VP of Strategic Planning and Analysis. Mr. Besselman's experience includes five years of consulting at McKinsey & Company, and he was most recently VP of Strategic Planning and Analysis at Hollywood Video.
Lon Weingart will be a consultant to the Company for approximately six months overseeing the operations of the business. Mr. Weingart's experience includes Director of Merchandising and Director of Product Development at Starbucks, VP and SVP of Marketing at Hollywood Video, and most recently SVP of Operations at Hollywood Video.
Jim Marcum, who joined the Company's Board of Directors when Mark Wattles became Chairman, has been asked by the Board to take an active role with respect to the Company's financial operations and restructuring strategy. Mr. Marcum's prior experience includes Treasurer of Melville Corporation, CFO of Marshall's, Vice Chairman and CFO of Stage Stores, CFO of Hollywood Video, and most recently a private investor.
Commenting on the changes, Mark Wattles, Chairman and CEO, said, "I am excited to be working with some of the talent that led Hollywood Video through its successful turnaround. As a result of these changes, Ultimate is now a large Company with management experienced in running a large Company. As a Company, we want to thank David Workman for his partnership with Bill Pearse, our Company's founder, in building a great company and a great brand. Ultimate Electronics and Soundtrack have the best selection of mid to high end audio/video products with a low price guarantee and we are dedicated to being the Ultimate destination for entertainment. Our employees are known for having the best product knowledge in the industry. So, if you want to make sure you are buying the right product for your needs Ultimate and Soundtrack are the places to shop. I am confident with this team in place, not only will Ultimate and Soundtrack be great places to shop but, Ultimately, we will be financially successful as well."
Sales for the quarter ended January 31, 2005 were approximately $195.9 million, a decrease of 19.4 percent from $243.2 million for the same period in the previous year. Comparable store sales were down approximately 19 percent for the quarter ended January 31, 2005. The Company had previously reported comparable store sales for the month of November as down approximately 6 percent and December as down approximately 18 percent. Sales for the year ended January 31, 2005 were approximately $658.3 million, a decrease of 8 percent from $712.9 million for the previous year. Comparable store sales were down approximately 13 percent for the year ended January 31, 2005. In light of the Company's Chapter 11 filing, recent changes in management and the Board, and other financial issues that the Company is currently addressing, the Company is not providing any guidance on its earnings or results of operations. In addition, the reported sales figures in this press release are preliminary and subject to adjustment.
It is not currently possible to predict the length of time the Company will operate under the protection of Chapter 11 and the supervision of the Bankruptcy Court, when the Company will file a plan or plans of reorganization with the Bankruptcy Court, the outcome of the Chapter 11 proceedings in general, or the effect of the proceedings on the business of the Company or on the interest of the various interested parties. Based upon testimony given at the DIP financing hearing on February 14, 2005 by FTI Consulting, it appears unlikely that the outcome of the Company's reorganization will result in any value for the holders of our common stock. The Company does, however, believe that with additional capital, the reorganization will result in an ongoing business that will be good for its customers, creditors and employees.
Commenting on the Company's financial outlook, Mark Wattles, Chairman and CEO, said, "Despite the Company's recent difficulties caused in part by aggressive growth strategies of prior management, I believe that this remains a good business. The reorganization will give us the opportunity to fix the Company's financial and operational structure. I believe the outcome of our reorganization will provide future opportunities for our creditors and our employees."
Associated Press
Winn-Dixie Files Bankruptcy Reorganization
Tuesday February 22, 1:57 am ET
Winn-Dixie Announces Bankruptcy Reorganization After Losses
JACKSONVILLE, Fla. (AP) -- Supermarket giant Winn-Dixie Stores Inc. said Tuesday it has filed for bankruptcy reorganization, less than two weeks after reporting decreased revenues and increased losses from a year ago.
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Winn-Dixie and 23 of its U.S. subsidiaries filed for Chapter 11 reorganization late Monday in U.S. Bankruptcy Court for the Southern District of New York, a company news release said.
The Jacksonville-based company also announced Tuesday that it has secured an $800 million credit facility from Wachovia Bank N.A. to help pay for its reorganization, the release said. The credit facility, subject to court approval, replaces the company's previous $600 million credit line.
The company plans to use the reorganization to improve its operations and financial performance, but also to reduce its expenses and decide how to use its assets to make its stores more productive, the release said.
"This includes achieving significant cost reductions, improving the merchandising and customer service in all locations and generating a sense of excitement in the stores," said Peter Lynch, president and chief executive officer.
The company said 920 Winn-Dixie stores in eight southeastern states and the Bahamas are open.
But Winn-Dixie said it will seek court approval to terminate the leases of two warehouses and about 150 stores that were closed previously, for an annual cash savings of approximately $60 million. It also plans to sell all of its remaining manufacturing operations to reduce expenses, the release said.
For the first six months of this fiscal year, Winn-Dixie reported sales of $5.41 billion on a net loss of $552.8 million or $3.93 per share, compared with sales of $5.65 billion on a net loss of $78.3 million or 56 cents per share, for the same period in 2004.
Winn-Dixie Stores Inc. ranks 162 on the Fortune 500 list.
Winn-Dixie Files Bankruptcy Reorganization
Tuesday February 22, 1:57 am ET
Winn-Dixie Announces Bankruptcy Reorganization After Losses
JACKSONVILLE, Fla. (AP) -- Supermarket giant Winn-Dixie Stores Inc. said Tuesday it has filed for bankruptcy reorganization, less than two weeks after reporting decreased revenues and increased losses from a year ago.
ADVERTISEMENT
Winn-Dixie and 23 of its U.S. subsidiaries filed for Chapter 11 reorganization late Monday in U.S. Bankruptcy Court for the Southern District of New York, a company news release said.
The Jacksonville-based company also announced Tuesday that it has secured an $800 million credit facility from Wachovia Bank N.A. to help pay for its reorganization, the release said. The credit facility, subject to court approval, replaces the company's previous $600 million credit line.
The company plans to use the reorganization to improve its operations and financial performance, but also to reduce its expenses and decide how to use its assets to make its stores more productive, the release said.
"This includes achieving significant cost reductions, improving the merchandising and customer service in all locations and generating a sense of excitement in the stores," said Peter Lynch, president and chief executive officer.
The company said 920 Winn-Dixie stores in eight southeastern states and the Bahamas are open.
But Winn-Dixie said it will seek court approval to terminate the leases of two warehouses and about 150 stores that were closed previously, for an annual cash savings of approximately $60 million. It also plans to sell all of its remaining manufacturing operations to reduce expenses, the release said.
For the first six months of this fiscal year, Winn-Dixie reported sales of $5.41 billion on a net loss of $552.8 million or $3.93 per share, compared with sales of $5.65 billion on a net loss of $78.3 million or 56 cents per share, for the same period in 2004.
Winn-Dixie Stores Inc. ranks 162 on the Fortune 500 list.
Winn-Dixie Stores, Inc. Files for Chapter 11 Reorganization to Address Financial and Operational Challenges
Tuesday February 22, 12:05 am ET
All 920 Stores Open For Business
Company Obtains $800 Million Dip Financing Commitment From Wachovia Bank
JACKSONVILLE, Fla., Feb. 22 /PRNewswire-FirstCall/ -- Winn-Dixie Stores, Inc. (NYSE: WIN - News) announced today that, in order to address the financial and operational challenges that have hampered its performance, the Company and 23 of its U.S. subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filings were made in the evening of February 21 in the U.S. Bankruptcy Court for the Southern District of New York.
All 920 Winn-Dixie stores in eight states and the Bahamas are open and serving customers. The Company's Customer Reward Card is being honored as usual and all other customer programs and policies, including those pertaining to coupons, gift cards and refunds, remain in effect.
Winn-Dixie intends to use the reorganization process to take additional action to improve its operations and financial performance and strengthen its business. The Company is moving forward with new sales and merchandising initiatives to improve its customers' shopping experience and help drive sales growth across its chain. In addition, as part of its Chapter 11 restructuring, the Company will implement further asset rationalization, additional asset sales and expense reduction plans to enhance productivity and take best advantage of its asset base. The Company is also taking steps to substantially reduce its lease obligations on previously closed stores.
To fund its continuing operations during the restructuring, Winn-Dixie has secured an $800 million debtor-in-possession (DIP) financing facility from Wachovia Bank, N.A. Subject to court approval, the DIP credit facility, which replaces the Company's previous $600 million credit line, will be used to supplement the Company's cash flow during the reorganization process.
Following the recent announcement of Winn-Dixie's second quarter financial results, in which the Company reported increased losses and reduced liquidity, coupled with subsequent credit downgrades from the major debt rating agencies, Winn-Dixie experienced a tightening of trade credit from some of its vendors, which further reduced its cash availability. As a result, the Company concluded, after consultation with its advisors, that its interests and the interests of its creditors, associates, customers, and the communities in which it operates will be best served by continuing its turnaround by reorganizing under Chapter 11 of the Bankruptcy Code.
Peter Lynch, President and Chief Executive Officer of Winn-Dixie, said: "We intend to use this reorganization process to take the actions necessary to position Winn-Dixie for future success. This includes achieving significant cost reductions, improving the merchandising and customer service in all locations and generating a sense of excitement in the stores. We deeply regret any adverse impact the Chapter 11 filing may have on our associates, vendors, shareholders and business partners. However, having spent the last two months taking an in-depth look at the Company and visiting over 50 stores across our chain, I am convinced that the Chapter 11 process will give us the opportunity we need to restructure our finances, strengthen our business performance and achieve a sustained turnaround at Winn-Dixie."
Mr. Lynch continued, "We will focus on increasing sales quickly and cost- effectively across the chain by improving the execution of merchandising and sales-focused initiatives, reinvigorating the Company's store associates, and restoring a sales-driven culture across the organization. These plans include enhancing Winn-Dixie's perishables offerings and other product merchandising, as well as implementing store sales competitions and other initiatives to motivate associates to drive sales."
In addition, Mr. Lynch said, Winn-Dixie intends to:
-- Evaluate the performance of every store and the terms of every lease in
the Company's real estate portfolio with the objective of achieving a
rationalized store "footprint" that allows the Company to operate
profitably and increase cash flow and return on invested capital;
-- Seek Bankruptcy Court approval to immediately terminate the leases of
two warehouses and approximately 150 stores that were closed
previously, resulting in an annual cash savings of approximately $60
million; and
-- Pursue all opportunities to further reduce annual expenses and to sell
non-core assets, including all remaining manufacturing operations.
No final decisions regarding any additional store closings or market departures, beyond those previously announced by the Company, have been made at this time. The Company will announce any such decisions at a later date.
Winn-Dixie has filed more than 25 "First Day Motions" in the Bankruptcy Court in New York to support its associates and vendors, together with its customers and other stakeholders. The court filings include requests to ensure that the Company will not have any interruption in maintaining the freshest products in its stores, honor its advertised and Customer Rewards Card specials, and ensure no disruption in its interaction with customers.
Company associates are being paid in the usual manner and their health and welfare benefits are expected to continue without disruption. The Company's 401(k) profit sharing plan is maintained independently of the Company and is protected under federal law. The plan will continue to be administered as usual.
In its most recent quarterly report on Form 10-Q, Winn-Dixie reported total assets of $2.2 billion and total liabilities of $1.9 billion, on a consolidated basis, as of January 12, 2005. The Company's subsidiary in the Bahamas was not included in the Chapter 11 filing and is operating as normal. WIN General Insurance, Inc., the Company's captive insurance entity, also was not included in the filing.
Winn-Dixie's legal advisors are Skadden, Arps, Slate, Meagher & Flom LLP and King & Spalding LLP. The Company's financial advisors are XRoads Solutions Group LLC and The Blackstone Group LP.
More information about Winn-Dixie's reorganization case is available on the Company's Web site at http://www.winn-dixie.com or as follows: Customers: 1-866-WINN-DIXIE (1-866-946-6349), Media: Kekst and Company -- Wendi Kopsick, (212) 521-4867, Caroline Gentile, (212) 521-4883, or Michael Freitag, (212) 521-4896. Investors: 212-521-4835.
About Winn-Dixie
Winn-Dixie Stores, Inc., is one of the nation's largest food retailers. Founded in 1925, the Company is headquartered in Jacksonville, FL. For more information, please visit http://www.winn-dixie.com.
Forward-Looking Statements
Certain statements made in this press release may constitute "forward- looking statements" within the meaning of the federal securities laws. These forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from the expected results described in the forward-looking statements. These forward-looking statements include and may be indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "believes," or "intends" and similar words and phrases. There are a number of factors that could cause the Company's actual results to differ materially from the expected results described in the Company's forward-looking statements.
There can be no assurance that the Company's restructuring will be successful. Risk factors related to its restructuring efforts that could cause actual results to differ from these forward-looking statements include, but are not limited to, the following: the Company's ability to continue as a going concern; the Company's ability to obtain court approval for its DIP facility; court approval of the Company's first day papers or other motions filed with the bankruptcy court from time to time; the ability of the Company to operate under the terms of the Company's DIP facility; the ability of the Company to develop, confirm and consummate plans of reorganization; risks associated with third parties seeking and obtaining court approval to terminate or shorten plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to chapter 7 cases; the potential adverse impact of the Chapter 11 cases on the Company's liquidity and results of operations; the ability of the Company to obtain and maintain trade credit and shipments and terms with vendors and service providers for current and future orders and to maintain in-stock positions for all of its product offerings; the Company's ability to maintain contracts that are critical to its operations; the ability of the Company to attract and retain customers; the ability of the Company to attract, motivate and retain key executives and associates; and potential adverse publicity.
In addition, the Company faces a number of risks with respect to its continuing business operations, including but not limited to: the Company's ability to execute its strategic initiatives, including asset rationalization, store upgrades, expense reduction, brand positioning and customer service, and to fund its store upgrades and brand positioning initiatives; the Company's ability to increase sales and market share through the brand-related initiatives being tested in the Company's lead markets; the Company's ability to increase capital spending levels in the future to invest in its store base and other capital projects; the Company's ability to manage its inventory efficiently; and the Company's response to the entry of new competitors in its markets, including traditional grocery store openings and the entry of non- traditional grocery retailers such as mass merchandisers, supercenters, warehouse club stores, dollar-discount stores, drug stores and conventional department stores.
Please refer to discussions of these and other factors in this news release, in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2004, the Quarterly Report on Form 10-Q for the quarter ended January 12, 2005, and other Company filings with the Securities and Exchange Commission. These statements are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly revise or update these forward-looking statements, whether as a result of new information, future events or otherwise.
Price: 61.00
Coupon (%): 8.875
Maturity Date: 1-Apr-2008
Yield to Maturity (%): 28.668
Current Yield (%): 14.549
Debt Rating: CCC
Coupon Payment Frequency: Semi-Annual
First Coupon Date: 1-Oct-2001
Type: Corporate
Industry: Industrial
CALL SCHEDULE
Date Price Yield to Call (%)
1-Apr-2005 104.438 686.685
1-Apr-2006 102.219 65.481
1-Apr-2007 100.000 37.190
OFFERING INFORMATION
Quantity Available: 100
Minimum Trade Qty: 5
Dated Date: 29-Mar-2001
Settlement Date: 25-Feb-2005
Tuesday February 22, 12:05 am ET
All 920 Stores Open For Business
Company Obtains $800 Million Dip Financing Commitment From Wachovia Bank
JACKSONVILLE, Fla., Feb. 22 /PRNewswire-FirstCall/ -- Winn-Dixie Stores, Inc. (NYSE: WIN - News) announced today that, in order to address the financial and operational challenges that have hampered its performance, the Company and 23 of its U.S. subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filings were made in the evening of February 21 in the U.S. Bankruptcy Court for the Southern District of New York.
All 920 Winn-Dixie stores in eight states and the Bahamas are open and serving customers. The Company's Customer Reward Card is being honored as usual and all other customer programs and policies, including those pertaining to coupons, gift cards and refunds, remain in effect.
Winn-Dixie intends to use the reorganization process to take additional action to improve its operations and financial performance and strengthen its business. The Company is moving forward with new sales and merchandising initiatives to improve its customers' shopping experience and help drive sales growth across its chain. In addition, as part of its Chapter 11 restructuring, the Company will implement further asset rationalization, additional asset sales and expense reduction plans to enhance productivity and take best advantage of its asset base. The Company is also taking steps to substantially reduce its lease obligations on previously closed stores.
To fund its continuing operations during the restructuring, Winn-Dixie has secured an $800 million debtor-in-possession (DIP) financing facility from Wachovia Bank, N.A. Subject to court approval, the DIP credit facility, which replaces the Company's previous $600 million credit line, will be used to supplement the Company's cash flow during the reorganization process.
Following the recent announcement of Winn-Dixie's second quarter financial results, in which the Company reported increased losses and reduced liquidity, coupled with subsequent credit downgrades from the major debt rating agencies, Winn-Dixie experienced a tightening of trade credit from some of its vendors, which further reduced its cash availability. As a result, the Company concluded, after consultation with its advisors, that its interests and the interests of its creditors, associates, customers, and the communities in which it operates will be best served by continuing its turnaround by reorganizing under Chapter 11 of the Bankruptcy Code.
Peter Lynch, President and Chief Executive Officer of Winn-Dixie, said: "We intend to use this reorganization process to take the actions necessary to position Winn-Dixie for future success. This includes achieving significant cost reductions, improving the merchandising and customer service in all locations and generating a sense of excitement in the stores. We deeply regret any adverse impact the Chapter 11 filing may have on our associates, vendors, shareholders and business partners. However, having spent the last two months taking an in-depth look at the Company and visiting over 50 stores across our chain, I am convinced that the Chapter 11 process will give us the opportunity we need to restructure our finances, strengthen our business performance and achieve a sustained turnaround at Winn-Dixie."
Mr. Lynch continued, "We will focus on increasing sales quickly and cost- effectively across the chain by improving the execution of merchandising and sales-focused initiatives, reinvigorating the Company's store associates, and restoring a sales-driven culture across the organization. These plans include enhancing Winn-Dixie's perishables offerings and other product merchandising, as well as implementing store sales competitions and other initiatives to motivate associates to drive sales."
In addition, Mr. Lynch said, Winn-Dixie intends to:
-- Evaluate the performance of every store and the terms of every lease in
the Company's real estate portfolio with the objective of achieving a
rationalized store "footprint" that allows the Company to operate
profitably and increase cash flow and return on invested capital;
-- Seek Bankruptcy Court approval to immediately terminate the leases of
two warehouses and approximately 150 stores that were closed
previously, resulting in an annual cash savings of approximately $60
million; and
-- Pursue all opportunities to further reduce annual expenses and to sell
non-core assets, including all remaining manufacturing operations.
No final decisions regarding any additional store closings or market departures, beyond those previously announced by the Company, have been made at this time. The Company will announce any such decisions at a later date.
Winn-Dixie has filed more than 25 "First Day Motions" in the Bankruptcy Court in New York to support its associates and vendors, together with its customers and other stakeholders. The court filings include requests to ensure that the Company will not have any interruption in maintaining the freshest products in its stores, honor its advertised and Customer Rewards Card specials, and ensure no disruption in its interaction with customers.
Company associates are being paid in the usual manner and their health and welfare benefits are expected to continue without disruption. The Company's 401(k) profit sharing plan is maintained independently of the Company and is protected under federal law. The plan will continue to be administered as usual.
In its most recent quarterly report on Form 10-Q, Winn-Dixie reported total assets of $2.2 billion and total liabilities of $1.9 billion, on a consolidated basis, as of January 12, 2005. The Company's subsidiary in the Bahamas was not included in the Chapter 11 filing and is operating as normal. WIN General Insurance, Inc., the Company's captive insurance entity, also was not included in the filing.
Winn-Dixie's legal advisors are Skadden, Arps, Slate, Meagher & Flom LLP and King & Spalding LLP. The Company's financial advisors are XRoads Solutions Group LLC and The Blackstone Group LP.
More information about Winn-Dixie's reorganization case is available on the Company's Web site at http://www.winn-dixie.com or as follows: Customers: 1-866-WINN-DIXIE (1-866-946-6349), Media: Kekst and Company -- Wendi Kopsick, (212) 521-4867, Caroline Gentile, (212) 521-4883, or Michael Freitag, (212) 521-4896. Investors: 212-521-4835.
About Winn-Dixie
Winn-Dixie Stores, Inc., is one of the nation's largest food retailers. Founded in 1925, the Company is headquartered in Jacksonville, FL. For more information, please visit http://www.winn-dixie.com.
Forward-Looking Statements
Certain statements made in this press release may constitute "forward- looking statements" within the meaning of the federal securities laws. These forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from the expected results described in the forward-looking statements. These forward-looking statements include and may be indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "believes," or "intends" and similar words and phrases. There are a number of factors that could cause the Company's actual results to differ materially from the expected results described in the Company's forward-looking statements.
There can be no assurance that the Company's restructuring will be successful. Risk factors related to its restructuring efforts that could cause actual results to differ from these forward-looking statements include, but are not limited to, the following: the Company's ability to continue as a going concern; the Company's ability to obtain court approval for its DIP facility; court approval of the Company's first day papers or other motions filed with the bankruptcy court from time to time; the ability of the Company to operate under the terms of the Company's DIP facility; the ability of the Company to develop, confirm and consummate plans of reorganization; risks associated with third parties seeking and obtaining court approval to terminate or shorten plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to chapter 7 cases; the potential adverse impact of the Chapter 11 cases on the Company's liquidity and results of operations; the ability of the Company to obtain and maintain trade credit and shipments and terms with vendors and service providers for current and future orders and to maintain in-stock positions for all of its product offerings; the Company's ability to maintain contracts that are critical to its operations; the ability of the Company to attract and retain customers; the ability of the Company to attract, motivate and retain key executives and associates; and potential adverse publicity.
In addition, the Company faces a number of risks with respect to its continuing business operations, including but not limited to: the Company's ability to execute its strategic initiatives, including asset rationalization, store upgrades, expense reduction, brand positioning and customer service, and to fund its store upgrades and brand positioning initiatives; the Company's ability to increase sales and market share through the brand-related initiatives being tested in the Company's lead markets; the Company's ability to increase capital spending levels in the future to invest in its store base and other capital projects; the Company's ability to manage its inventory efficiently; and the Company's response to the entry of new competitors in its markets, including traditional grocery store openings and the entry of non- traditional grocery retailers such as mass merchandisers, supercenters, warehouse club stores, dollar-discount stores, drug stores and conventional department stores.
Please refer to discussions of these and other factors in this news release, in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2004, the Quarterly Report on Form 10-Q for the quarter ended January 12, 2005, and other Company filings with the Securities and Exchange Commission. These statements are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly revise or update these forward-looking statements, whether as a result of new information, future events or otherwise.
Price: 61.00
Coupon (%): 8.875
Maturity Date: 1-Apr-2008
Yield to Maturity (%): 28.668
Current Yield (%): 14.549
Debt Rating: CCC
Coupon Payment Frequency: Semi-Annual
First Coupon Date: 1-Oct-2001
Type: Corporate
Industry: Industrial
CALL SCHEDULE
Date Price Yield to Call (%)
1-Apr-2005 104.438 686.685
1-Apr-2006 102.219 65.481
1-Apr-2007 100.000 37.190
OFFERING INFORMATION
Quantity Available: 100
Minimum Trade Qty: 5
Dated Date: 29-Mar-2001
Settlement Date: 25-Feb-2005
Last British car maker collapses
MG Rover, which built the original Minis, Land Rovers and MGBs, abruptly shuts down. It's the final straw for the British-owned auto industry.
By MSN Money wire reports
Cash-strapped car manufacturer MG Rover Group -- the last major British-owned car manufacturer -- succumbed to its mounting debts Friday and filed for a form of bankruptcy protection after a deal with a Chinese automaker fell through and a government loan was not granted.
Phoenix Venture Holdings, the parent company of Rover, said it had asked PricewaterhouseCoopers to take over administration of the company after it was forced to suspend production at its British factory Thursday when suppliers -- spooked by reports the Shanghai Automotive Industrial Co. was pulling out of a takeover deal -- stopped providing goods.
MG Rover confirmed Friday that the talks with SAIC in China had come to an end and that the negotiating team, including Rover Chairman John Towers, had left Shanghai. SAIC had reportedly insisted that MG Rover be able to demonstrate it was solvent at the point of signing a deal and for the following two years.
'The English Patient'
A British icon dating back to 1905, MG Rover has, in its various guises, produced some classic British cars alongside the mini, including the Morris Oxford, the Austin Seven, the MGB sports car and the cheap and cheerful Mini Metro.
Rover was sold to Germany's BMW in the 1990s -- when the German media dubbed it "The English Patient'' due to its poor financial health -- but returned to British ownership when BMW sold it to holding company Phoenix four years ago for 10 pounds plus costs.
Since then, however, Rover has struggled, and many say it was always likely to fail.
"Rover needed major investment and new models very quickly if it was to survive but, since the BMW years, Rover has not had it,'' said auto industry expert Tom Donnelly from nearby Coventry University.
"When Phoenix came in, BMW had already cherry-picked the company …'' he told Reuters. BMW retained the rights to make cars under the revered Mini name, and it sold the Land Rover division to Ford.
Other than a few niche makers who hand-build sports cars, there are no British-owned carmakers left besides Rover. Ford also owns two other historic British marques, Jaguar and Aston Martin. BMW owns Rolls Royce. Volkswagen owns Bentley.
Bad for Blair, worse for workers
The troubles at Rover, which will affect 6,000 workers at the company's Longbridge plant in central England and thousands more at companies that supply the factory with parts, come at a sensitive time for the government, with a general election just four weeks away.
Prime Minister Tony Blair talked by telephone with Chinese Prime Minister Wen Jiabao on Wednesday night and government officials had offered Rover a $188 million bridge loan to keep the company solvent to assist the deal.
"This is a terrible day for the work force of MG Rover and their families and for their suppliers," said Trade and Industry Secretary Patricia Hewitt, adding that the government would work with unions and Rover's future administrators to try to secure future car production at the factory.
St. Modwen Properties, the company that owns most of Longbridge, said it appeared certain the site would be turned into something other than a car plant.
"They've told us to turn up Monday,'' said 43-year-old Ashley Wilkes, who has worked at Longbridge for 18 years. "They've just told us we're entitled to 280 pounds ($524) for each year's service, up to the maximum of 12 years. It feels terrible.''
MG Rover, which built the original Minis, Land Rovers and MGBs, abruptly shuts down. It's the final straw for the British-owned auto industry.
By MSN Money wire reports
Cash-strapped car manufacturer MG Rover Group -- the last major British-owned car manufacturer -- succumbed to its mounting debts Friday and filed for a form of bankruptcy protection after a deal with a Chinese automaker fell through and a government loan was not granted.
Phoenix Venture Holdings, the parent company of Rover, said it had asked PricewaterhouseCoopers to take over administration of the company after it was forced to suspend production at its British factory Thursday when suppliers -- spooked by reports the Shanghai Automotive Industrial Co. was pulling out of a takeover deal -- stopped providing goods.
MG Rover confirmed Friday that the talks with SAIC in China had come to an end and that the negotiating team, including Rover Chairman John Towers, had left Shanghai. SAIC had reportedly insisted that MG Rover be able to demonstrate it was solvent at the point of signing a deal and for the following two years.
'The English Patient'
A British icon dating back to 1905, MG Rover has, in its various guises, produced some classic British cars alongside the mini, including the Morris Oxford, the Austin Seven, the MGB sports car and the cheap and cheerful Mini Metro.
Rover was sold to Germany's BMW in the 1990s -- when the German media dubbed it "The English Patient'' due to its poor financial health -- but returned to British ownership when BMW sold it to holding company Phoenix four years ago for 10 pounds plus costs.
Since then, however, Rover has struggled, and many say it was always likely to fail.
"Rover needed major investment and new models very quickly if it was to survive but, since the BMW years, Rover has not had it,'' said auto industry expert Tom Donnelly from nearby Coventry University.
"When Phoenix came in, BMW had already cherry-picked the company …'' he told Reuters. BMW retained the rights to make cars under the revered Mini name, and it sold the Land Rover division to Ford.
Other than a few niche makers who hand-build sports cars, there are no British-owned carmakers left besides Rover. Ford also owns two other historic British marques, Jaguar and Aston Martin. BMW owns Rolls Royce. Volkswagen owns Bentley.
Bad for Blair, worse for workers
The troubles at Rover, which will affect 6,000 workers at the company's Longbridge plant in central England and thousands more at companies that supply the factory with parts, come at a sensitive time for the government, with a general election just four weeks away.
Prime Minister Tony Blair talked by telephone with Chinese Prime Minister Wen Jiabao on Wednesday night and government officials had offered Rover a $188 million bridge loan to keep the company solvent to assist the deal.
"This is a terrible day for the work force of MG Rover and their families and for their suppliers," said Trade and Industry Secretary Patricia Hewitt, adding that the government would work with unions and Rover's future administrators to try to secure future car production at the factory.
St. Modwen Properties, the company that owns most of Longbridge, said it appeared certain the site would be turned into something other than a car plant.
"They've told us to turn up Monday,'' said 43-year-old Ashley Wilkes, who has worked at Longbridge for 18 years. "They've just told us we're entitled to 280 pounds ($524) for each year's service, up to the maximum of 12 years. It feels terrible.''