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May 14, 2009
Atlantic Yards developer to sell stock to raise capital for fiscal life-support
Seeing as how we've been growling at Atlantic Yards developer Forest City Ratner for over five years, we're gonna give you the plain-English bearish analysis of the latest press release from parent company Forest City Enterprises (FCE).
In what would appear to be an extreme measure, FCE is planning to issue more stock to raise cash in order to help restore its balance sheet.
Saddled by underperforming assets and a crushing debt burden, during the past year FCE has sold properties, renegotiated some of its loans, and taken steps to cut costs, including multiple rounds of layoffs.
Apparently, these measures haven't been enough, and now the company is hoping to raise much-needed cash from the equity marketplace, even though (and perhaps, because) banks have been reluctant to extend more credit.
LINKS:
PR Newswire (press release), Forest City Provides Update on Fiscal 2009 First Quarter
TradingMarkets.com (press release), Forest City Enterprises To Offer 40 Million Shares
The Wall Street Journal, Forest City To Sell 40M Shares, Seeks Credit-Line Extension
The Cleveland Plain Dealer, Forest City to issue, sell 40 million shares to pay off debt
Bloomberg.com, CommVault, Forest City, MBIA, Whole Foods: U.S. Equity Preview
Posted by lumi at May 14, 2009 6:49 AM