westrac bailout, page-9

More support for the fact that this is a bailout...

http://www.businessspectator.com.au/bs.nsf/Article/economic-recovery-acquisitions-banks-lending-freez-pd20100225-2Z86F?OpenDocument&src=mp

The moolah merger

Kerry Stokes lobbed his early nomination for billionaire deal of the year last week when he announced the merger of his private heavy equipment business WesTrac with his listed media empire, Seven Network.

While Stokes is painting the deal as a way to improve Sevens revenue base, diversify its earnings stream and pursue new growth opportunities, there is a strong argument that Stokes has come up with one of the most creative ways to find cash.

As many commentators have pointed out, the deal will allow Stokes to use $600 million of cash sitting in Seven Network to pay down part of WesTracs $1 billion debt. While you would assume a business of the size and strength of WesTrac would have been able to roll over its funding facility, it wouldnt have been easy and it wouldnt have been cheap.