Outros sites Medialivre
Caldeirão da Bolsa

NORTEL perto da falência, price target zero

Espaço dedicado a todo o tipo de troca de impressões sobre os mercados financeiros e ao que possa condicionar o desempenho dos mesmos.

NORTEL perto da falência, price target zero

por atomez » 13/12/2008 4:44

Esta notícia surpreende-me muito.

A Nortel é o maior fabricante e fornecedor de material de telecomunicações na América do Norte (é Canadiana) e parecia uma daquelas empresas à prova de recessão.

Afinal...

Nortel may face bankruptcy, price target cut to zero

Posted: November 13, 2008, 9:00 AM by Jonathan Ratner

It’s not often that you see an analyst cut their price target on a stock to zero. But when a company looks like it may face bankruptcy, you can see why it may be a sensible choice. The analyst is Mark Sue with RBC Capital Markets. The company? You guessed it, Nortel Networks Corp.

It has US$2.65-billion in cash but is overwhelmed by a hefty cash burn rate and debt. The macro environment is getting worse, Nortel has a challenging industry position, and it faces liquidity concerns when the capital markets are essentially closed, Mr. Sue told clients. As a result, he thinks bankruptcy is a distinct possibility down the road.

“The world moved on while Nortel was stuck in restructuring mode, and the lack of financial flexibility means Nortel has to rely on asset sales to fund future operations,” the analyst said.

Without government intervention or a major financial sponsor stepping up, Nortel may run out of cash before its US$1-billion 2011 bonds mature, Mr. Sue said. He noted that Nortel began 2008 with US$3.2-billion in cash but has had negative free cash flow of US$607-million year-to-date. If it goes through US$250-million in the fourth quarter, it will finish the year with US$2.4-billion in cash.

But next year, if Nortel burns through US$800-million in cash, as the RBC analysts says it could, that brings its cash closer to US$1.6-billion. Since it needs US$1-billion to run its business and US$500-million for Chinese joint ventures, the money supply starts to look pretty thin.

Since common equity holders are last in line, Mr. Sue said his price target falls to nil from US$1.50. His rating: underperform. The analyst added that Nortel’s distressed situation means potential bidders for its Metro Ethernet assets may offer distressed prices. As a result, Nortel could decide to sell its CDMA assets as well. But Mr. Sue is not sure if Nortel call sell more than half of the company without triggering its asset sale debt covenants.

And if it needed another problem, Nortel’s already underfunded pension (US$1.1-billion at the end of last year) may have more than US$500-million in liabilities tied to Metro Ethernet. But with roughly 53% of the US$8.1-billion plan invested in equities and assuming a decline of 40%, Mr. Sue noted that the deficit may swell to US$2.8-billion.
As pessoas são tão ingénuas e tão agarradas aos seus interesses imediatos que um vigarista hábil consegue sempre que um grande número delas se deixe enganar.
Niccolò Machiavelli
http://www.facebook.com/atomez
Avatar do Utilizador
 
Mensagens: 5852
Registado: 4/11/2002 22:48
Localização: Entre Marte e Vénus

Quem está ligado:
Utilizadores a ver este Fórum: Google [Bot], Google Adsense [Bot], navaldoc, OCTAMA, PAULOJOAO, record4995, Shimazaki_2 e 68 visitantes