Davenport Downgrades Chesapeake (CSK) to Sell, Equity Holders Likely Wiped Out
CSK Hot Sheet
Rating Summary:0 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Davenport downgrades Chesapeake Corp. (NYSE: CSK) to Sell and drops coverage.
Davenport analyst says, "Last night, Chesapeake provided an update on its financial restructuring plan. More than 70% of the holders of the company’s Sterling denominated notes and Euro-denominated notes have formed an ad hoc committee and retained Houlihan Lokey as their advisor. They are meeting with Chesapeake to come up with a restructuring plan that would address CSK’s short-term and long-term financing needs, capital structure and operational needs...EQUITY HOLDERS LIKELY WIPED OUT...We had anticipated some dilution from the exchange process that management launched with regard to the Sterling- and Euro-denominated debt. However, based on management’s comments, a more or less complete wipe-out of existing equity holders seems to be the price for the company’s survival. As such, we find it difficult to foresee anything but downside in the shares...DROPPING COVERAGE. We believe this is now basically a fixed-income story, and as such are dropping coverage of CSK’s shares. Our Reduce/Sell rating and estimates should not be relied upon going forward."
Chesapeake Corporation (Chesapeake) is a supplier of specialty paperboard packaging products in Europe, with interests in North America and Asia. [SM]
Davenport analyst says, "Last night, Chesapeake provided an update on its financial restructuring plan. More than 70% of the holders of the company’s Sterling denominated notes and Euro-denominated notes have formed an ad hoc committee and retained Houlihan Lokey as their advisor. They are meeting with Chesapeake to come up with a restructuring plan that would address CSK’s short-term and long-term financing needs, capital structure and operational needs...EQUITY HOLDERS LIKELY WIPED OUT...We had anticipated some dilution from the exchange process that management launched with regard to the Sterling- and Euro-denominated debt. However, based on management’s comments, a more or less complete wipe-out of existing equity holders seems to be the price for the company’s survival. As such, we find it difficult to foresee anything but downside in the shares...DROPPING COVERAGE. We believe this is now basically a fixed-income story, and as such are dropping coverage of CSK’s shares. Our Reduce/Sell rating and estimates should not be relied upon going forward."
Chesapeake Corporation (Chesapeake) is a supplier of specialty paperboard packaging products in Europe, with interests in North America and Asia. [SM]
You May Also Be Interested In
- UPDATE: UBS Downgrades Wisconsin Energy (WEC) to Neutral; Taking Some Off The Table
- Canaccord Genuity Maintains a 'Hold' on Tiffany & Co. (TIF); Cutting PT and Estimates
- UBS Maintains a 'Buy' on Teva Pharma (TEVA); CEO Highlights From Conference Call
Create E-mail Alert Related Categories
DowngradesRelated Entities
DavenportSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
