Whereas the thought might sound helpful for shareholders, there’s a possible drawback with debt holders. One monetary professional has lately warned that separating WeBuyCars from Transaction Capital might be troublesome for debt holders.
This transfer would primarily depart them with all the present debt however with out the dear WeBuyCars asset, probably creating challenges in negotiations associated to debt agreements.
Whereas most of Transaction Capital’s debt is protected inside SA Taxi, unbundling WeBuyCars may face resistance from current debt holders.
One other professional from FNB Wealth and Investments added that even when that debt is legally protected, leaving debt holders with potential points may hurt Transaction Capital’s future financing alternatives as it could negatively influence the corporate’s credibility with banks and make it more durable to get extra credit score sooner or later.
So, these are the elements they must have in mind earlier than making any large resolution on unbundling and itemizing.
