What will Buffet buy?
03-28-2020, 03:43 PM
#12
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Originally Posted by Mesabah
Buffet would likely provide DIP in a chapter 11 in order to take control after. I don't see him buying anyone beforehand.
Does he do DIP financing? Wasn’t aware of that, and that is not what he did with BofA as I recall. Tend to lose best management in those times? And he’s a believer in talent. Doesn’t seem his style, bankruptcy is so...unseemly.
03-28-2020, 03:46 PM
#13
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Originally Posted by majorpilot
Does he do DIP financing? Wasn’t aware of that, and that is not what he did with BofA as I recall. Tend to lose best management in those times? And he’s a believer in talent. Doesn’t seem his style, bankruptcy is so...unseemly.
03-28-2020, 03:48 PM
#14
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Originally Posted by Flyby1206
Agreed. He offered financing to BAC, GE, GS during the last crisis and I could easily see him offer more attractive financing to the airlines during this pandemic.
And he certainly saved BofA, especially after they bought the Countrywide house of cards. But l didn’t remember that GE was in BK.
03-28-2020, 04:02 PM
#16
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Originally Posted by Mesabah
Buffet would likely provide DIP in a chapter 11 in order to take control after. I don't see him buying anyone beforehand.
Originally Posted by majorpilot
Does he do DIP financing? Wasn’t aware of that, and that is not what he did with BofA as I recall. Tend to lose best management in those times? And he’s a believer in talent. Doesn’t seem his style, bankruptcy is so...unseemly.
On one hand, if you come in during BK, costs will be lower and ungainly obligations shed.
On the other hand a guy like WB can get some pretty good concessions from various creditors simply by re-negotiating contracts as a condition of purchase... most creditors would go along to avoid BK, where they'll get pennies on the dollar at best.
03-28-2020, 04:08 PM
#17
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Originally Posted by rickair7777
I would agree, not really his style.
On one hand, if you come in during BK, costs will be lower and ungainly obligations shed.
On the other hand a guy like WB can get some pretty good concessions from various creditors simply by re-negotiating contracts as a condition of purchase... most creditors would go along to avoid BK, where they'll get pennies on the dollar at best.
On one hand, if you come in during BK, costs will be lower and ungainly obligations shed.
On the other hand a guy like WB can get some pretty good concessions from various creditors simply by re-negotiating contracts as a condition of purchase... most creditors would go along to avoid BK, where they'll get pennies on the dollar at best.
A lifetime of success and proven integrity speak for themselves. I would bet creditors would do almost anything to have him involved, that’s the best assurance they’ll get what’s owed them back.
03-28-2020, 04:26 PM
#18
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Originally Posted by majorpilot
And he certainly saved BofA, especially after they bought the Countrywide house of cards. But l didn’t remember that GE was in BK.
03-28-2020, 04:57 PM
#19
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Originally Posted by majorpilot
Does he do DIP financing? Wasn’t aware of that, and that is not what he did with BofA as I recall. Tend to lose best management in those times? And he’s a believer in talent. Doesn’t seem his style, bankruptcy is so...unseemly.
03-28-2020, 05:03 PM
#20
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Originally Posted by Mesabah
The bank bailouts are an apples to oranges comparison. Banks were borrowing at the discount window at ZIRP, and then parking the money in bonds. Buffet never provided money to backstop those portfolio losses. He had zero risk in those investments, while yielding double digit returns. The airline situation right now is a completely different ballgame. I bet he doesn't touch any airlines this year, without the government backing the entire investment.
But a professional like Buffet could probably see a way to make money out of a carefully structured deal. Price will be right, and he could be in the driver's seat for the structure.
Of course there's always some risk, and I have no idea if WB or anyone like him would have the remotest interest in going there.
