BearingPoint weighs restructuring options
BearingPoint Inc.'s plans to sell some or all of its business have proved unsuccessful, and the company is now attempting to renegotiate the terms of some of its debt to comply with New York Stock Exchange regulations, reports the Washington Post
The credit crunch has created a difficult environment for mergers and acquisitions, hampering BearingPoint's plans to sell off parts of the company to pay down debt and boost its share price, the company said Wednesday. It is the latest in a series of setbacks for the McLean company, which provides software services to both private clients and government agencies such as the Marines and the Department of Health and Human Services.
BearingPoint received a notice from the exchange Tuesday saying it was not meeting the minimum market capitalization of $100 million. Earlier this year, the company received a similar letter from the exchange saying its share price had fallen below the minimum listing requirement of $1 per share.
Shares of the company hit a new 52-week low of 16 cents yesterday before closing at 19 cents a share, down 3.2 cents.
In addition, BearingPoint faces a potential April 15 deadline: On that date, some of the company's lenders have the option to require that the company pay back in full $200 million worth of debt, plus interest.
The company ended the second quarter with about $347 million in cash. Jamie Friedman, an analyst with Susquehanna Financial, said BearingPoint would need to end the year with more than that so that if it must pay its lenders, it can continue to function.
"The way they get there is by collecting the money that is owed to them from their customers," he said. "But sometimes collection can be out of your hands, especially in a difficult economy."