CIT has a number of questions for Carl Icahn and his 6 Billion dollar loan proposal.
Icahn has offered to underwrite a loan of the same size with only $150 million in fees and no provision that bondholders approve the restructuring plan but details haven’t yet been released. Whether there are other stipulations attached to Icahn’s offer isn’t yet clear. He’s been vocal in his frustration at the CIT board and some of their past financing decisions–suggesting that he’s vying for more control.
“Icahn seems to believe an orderly liquidation is best for the company, but how he plans to do this is unclear,” said Keefe, Bruyette & Woods analyst Sameer Gokhale, adding that until the company gets a better idea of his intentions regarding the board and restructuring strategies, their hands are tied.
Let’s be clear – Icahn is no champion of the “little guy”, he is in it to make money. The most money for him would be the liquidation of CIT.
While I don’t expect it to take place tomorrow at the earnings release, since they have until 10/29 to complete the exchange; however, I believe CIT Group will end up in Bankruptcy one way or another.
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