Take a look @ page 22 of the SKY Network Television Limited Simplified Disclosure Prospectus 2014 under "Consequences of insolvency".
The Bonds are unsecured.
Agree with that. Also normally bonds would be better than equity by a long shot. You can still grab the "NTA" and sell it and get back your money. Problem with SKY is that they have no "NTA" to grab as a debt holder. So in that event there is less protection for bond holders. But it is also feasible that in the event of windup or receivership, bondholders end up with 50 cents in the $ or 80 cents in the $ whilst equity holders get zilch.
The receiver could just let existing subscriptions run their due course without any new investment and take the cashflows on offer as a worst case scenario? (with a skeleton staff to cover IT)
I should premise my post in saying that in no way do I think Sky will fall over is a given. Just offering up hypothetical's.
Last edited by blackcap; 06-04-2020 at 06:10 PM.
Reason: premise bit
They do need to remember that the bond trading volumes are incredibly low. Not Sky's problem if a tiny fraction of current bondholders are willing to sell their bonds for pennies on the dollar.
They do need to remember that the bond trading volumes are incredibly low. Not Sky's problem if a tiny fraction of current bondholders are willing to sell their bonds for pennies on the dollar.
Saw same thing happened with Skellerup* bonds all those years ago - yield went through the roof to over 75% and the eager beavers piled in, to find the bonds worthless when Skellerup went into receivership.
Old Skellerup under Murray Bolton, bright eyed bushy tail executive of BIL.
Reply With Quote
Originally Posted by moimoi
Bookmarks