The turnaround of Pilgrim’s Pride may have been long by 2009 standards, but as Emily Chasan reports creditors probably made out better from the chicken producer’s reorganization than any other bankruptcy in the past year.
As if CIT didn’t have enough problems digging itself out of a credit morass, now it has Carl Icahn to contend with. Troubled by what he sees as sweetheart deals between CIT and its largest creditors, at the expense of the little-guy bondholder, Icahn has offered to underwrite the $6 billion the small-business lender says it needs to survive. Icahn’s offer sent CIT shares soaring by double digits … to well above a dollar.
An almost heart-warming effort is being mustered by CIT bondholders to keep the troubled lender from getting put under the TARP or stumbling into a much-anticipated bankruptcy. Some $3 billion in survival cash is seen in the pipeline — money that could strengthen CIT’s finances and allow it more time for a debt restructuring. An announcement is expected before the markets open this morning.
With government talks aimed at averting its collapse having, er, collapsed, CIT appears to be headed for bankruptcy. Dire predictions about a wave of failures by small and medium-sized businesses are still echoing, sustained by uncertainty. The suggestion that other lenders are going to step in and offer financing to CIT clients sounds hollow in the lingering recession.
CIT, the small-business financing company that provides funding for airlines, railways, retailers and manufacturers, should have little trouble securing some kind of government aid, whether in the form of a short-term loan, as seems to be the most likely scenario, or even a TARP or FDIC bailout.
One intriguing remark that Blackstone COO Tony James let slip on today’s earnings call is that it could be gearing up to sell an energy asset.
James explained that while opportunities to exit investments weren’t numerous, it had succeeded making a profit on the sale of pharmaceutical company Stiefel.
“We have another company in our portfolio… in the energy sector, which had some very, very exciting results finding unbelievable amounts of hydrocarbons and… that might be something we’d look to exit,” James said on a call to the media.
He didn’t identify the company so we’re doing the guessing ourselves — out of the current energy investments Blackstone lists on its website, we reckon Kosmos Energy, which has a significant oil field in Ghana, could fit the bill.