Friday, January 24, 2014

Service Point Solutions – update on situation

Within a document Service Point Solutions filed with Spain’s equivalent of the SEC on January 20th, SPS said that:

Google-Translate Spanish to English translation:
In view of the above, the proposed settlement offers by the company and rejected by banks, the serious difficulties the company is facing from the realization of collateral by part of the banks, and in the interests of all shareholders, creditors and employees of the group, and given that the deadline for filing bankruptcy ends on February 28, the Board of Directors of the Company at its meeting of January 16, 2014 has been agreed by unanimously start preparing the paperwork to file bankruptcy Service Point Solutions, SA and certain of its subsidiaries.”

Okay, here’s a bit more from the document filed by SPS with the Spain-SEC-like organization, but this is “in my words”, based on my reading, and interpretation, of what SPS said:

1)    SPS presented three different offers to its lending group – the latest one was in mid-December - to bring about a re-financing, reorganization, pay-down, pay-off, etc., etc. of its debt.  SPS’s lending group were not agreeable to any of those offers.

2)    Back in October, SPS filed for some sort of “pre-bankruptcy”.   I have no idea what a “pre-bankruptcy” is or what it accomplishes, other than putting everyone on notice that it (a full out BK) could happen.

And, with its latest filing, it’s apparent that, short of some last-minute miracle, SPS will file for Bankruptcy before February 28th.  I don’t know anything about the bankruptcy laws in Spain.  So, no way of knowing if SPS’ bankruptcy filing will be “like a U.S. Chapter 11” BK or a “like a U.S. Chapter 7” BK.  I would, however, suspect the former rather than the latter.

SPS has scheduled a shareholder’s meeting on Feb 23/24, 2014 in Barcelona.

I can’t even begin to imagine what SPS’s next financial-results report is going to say about SPS’ operations and results.  Apparently, lenders took control of SPS USA, SP UK, SP Sweden (Holmbergs) and SP Norway (Alkopi). SP Germany (Koebke) is reportedly in BK.

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