posted on
Mar 21, 2007 03:06PM
Just to clarify my thoughts on this deal - when it was first brought to our attention, the wording in either the pr or an SEC filing, I don't remember which, made it sound like the debt was picked up by SSDI, of which PTSC is a 45% owner. My speculation at the time was that there must be some assets on SSDI (accounts receivable/inventory) that justified SSDI picking up this debt. From more recent info released (quotes from John Burns regarding annual sales) I no longer think this is the case. I don't want to speculate what the actual transaction ended up being because if we go by just the info we have, yes, it looks like a terrible move. You are right in that PTSC would only be on the hook for their investment of $600k. However, if the debt was picked up by SSDI, in realistic terms that's a huge drain of money being paid to someone else that should be going partially to PTSC, assuming SSDI makes a profit.