Maybe IBM will transfer all the debts to the NewCo and then NewCo will file for Chalter 11?
4 replies (most recent on top)
NewCo NewCo NewCo who are we?? We are NewCo!! What do we do??? F— ALL
IBM’s debt has for the most part already been allocated by wall street Global finance stays with old IBM thus all of those leases stay there unless IBM chooses to factor them. Redhat debt is known and will be allocated to Cognitive division. The data center infrastructure/cloud build out is where IBM has discretion, and Newco will inherit that. In addition since no one else is involved, as an IBM to IBM transfer look for a very large head count to be transferred and then laid off Newco inherits the layoff and IBM claims their hands are clean. IBM learned this lesson on the Lenovo sale.
" Management did not reveal exactly how it will distribute IBM’s $ 64.7 billion in total debt between the two companies at the end of the second quarter, but did state that it is aiming for an investment grade rating for NewCo and while maintaining a better “Single A” rating for IBM. This suggests that NewCo will have quite a heavy debt burden. " Source ;https://www.de24.news/2020/10/will-the-spin-off-from-ibm-actually-benefit-shareholders.html , this is sick..if you spend 34 billion $ to Redhat than accept the cost under IBM Cloud , why GTS have to cover IBM' cost ? Let NewCo to build their own financials.
NewCo will be sold to the highest bidder, or any bidder for that matter.