Originally Posted by
cxhk
The US$5 billion loan / debt that everyone seem to like to quote is the HK$39 billion line of credit that the government had extended to CX... However, the not too intelligent / very ill informed people on this forum often don't look into the details... That US$5 billion / HK$39 billion dollar loan from.thr government was a line of credit, but CX has actually NOT drawn one cent from that line of credit even thought it was made available and then subsequent extended past the original availability deadline... What people don't seem to get is that, a line of credit NOT used is not debt... It is only debt if CX drawn and taken money out of it.
You clearly have NO IDEA what you’re talking about!
The rescue package was not a ‘line of credit’, it was a bailout/lifeline to save the company from imminent collapse, and consisted of a cocktail of
preferences shares, warrants and loans - compliments of you, me and Joe Public.
Read the entire article below:
https://www.washingtonpost.com/busin...434_story.html
“The sums owed are quietly accruing, though, and the interest rate will start ramping up in August 2023, from 3% currently to 9% by 2026. If Cathay keeps deferring preference dividends and adding them to its sum of debt, the annual interest bill alone on the prefs will top HK$2 billion by the middle of 2025 — roughly equivalent to its average net income in the last five pre-pandemic years. Those obligations will rank ahead of any dividends Cathay could hope to pay to its ordinary shareholders — and it’s also going to have to start paying down the principal, too.”
Like my learned mate NC said - “Never let the truth get in the way of a good rumour"
