> The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder—even for healthy chains.
Oooh, I am so happy if this really happens. The entire financial industry that makes "profits" from loading purchased companies up with debt and then leaving them to die needs to burn in a fire.
The strategy certainly works in the short term (and nets impressive "profits" for the owners/shareholders of such holdings), but in the long term... let's just hope no one will ever be able to pull through this kind of "deal" again.
The ones who organize these deals have already taken the money and are long gone. The ones holding the bag after it collapses are the employees, suppliers and institutional investors.
Of course - what happened, happened. But when banks recognize that it is not in their interest to give loans to holdings to purchase companies in order to get loans on them simply because eventually when the loans on the companies default the banks are on the hook again, they will not loan them money any more.
That's the inherent beauty of interconnected and sold loans - no one will be left spared when they eventually default.
Oooh, I am so happy if this really happens. The entire financial industry that makes "profits" from loading purchased companies up with debt and then leaving them to die needs to burn in a fire.
The strategy certainly works in the short term (and nets impressive "profits" for the owners/shareholders of such holdings), but in the long term... let's just hope no one will ever be able to pull through this kind of "deal" again.