Quote:
Originally Posted by Hugh
But if you didn't have the cash to invest in the infrastructure (which enables you to get more customers, which in turn increases your cash-flow), the only way is debt.
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Initally yes, but companies are meant to make money. The cable industry has always been in debt and not made a penny in profit. I know as I have about 1 ntl sdi bond and 1 and a bit telewest bonds left. These used to be many thousands of shares....
Yet, the cableco bosses gave themselves fat bonuses and pension packages. The late telewest boss (cob stenham) got a huge package now being spent by his wife. I don't see how that is good.
And the company went bankrupt in a sea of debt in part as a result of his actions.
In the corporate world, debt is okay (not really, but just going along here) to pay for expansions/infrastructure, particularly if there is a competitor doing a land grab. But it should only be used as a short term tool, not a permanent way to run a company.
When will vm pay off the debt, 2016, 2020? I can't remember the timescales now. But i bet when the deadline approaches, vm's bosses will have yet another excuse to refinance (if they can) and prolong the debt even further.