TOP 09 VANISHING COMPANIES IN 09 – II

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Year 2009 is the year of recession, in these tough times many companies vanishes while only few of them can resist the crises. Here are the lists of companies which will disappear in the year 2009. As per the research made by 24/7 Wall St. on some of the largest & well-known companies & listed down 09 companies which may disappear at the end of next year. These 09 companies are as follows:

6) The New York Times (NYT) has to repay $400 million in debt in the first half of 2009. It does not have the money. It plans to mortgage its headquarters, but it is uncertain what that will bring in an uncertain real estate market. The firm’s Boston Globe and regional newspaper operations lose money, so they will be hard to sell. NYT is controlled by the Sulzberger family which has super-majority voting shares. That won’t matter much when the company runs out of money. Another big media operation, perhaps News Corp (NWS) which owns The Wall Street Journal and The New York Post, will come in and auction off what it can and keep the flagship New York Times newspaper and NYTimes.com website.

7) Nortel (NT), the huge telecom equipment company, has already been mentioned as a firm which could file for bankruptcy. That may be a game to get creditors to cut down their demands. It could be that a huge contraction in the industry which is also undermining the fortunes of competitor Alcatel-Lucent (ALU) is pulling Nortel under. Nortel keeps losing money and has cut about as many people as it can and still stay in business. With the need for its products and services falling as the recession grows. Nortel has a pension obligation which may approach $3 billion. Selling divisions in a poor credit market will be hard. A bankruptcy filing would let a court run an auction.
8) Charter Communications (CHTR) has over $20 billion in debt. The cable business usually drives reasonable cash flow, but Charter has to upgrade its system to better compete with telecom companies. It does not have that money. Debt service is overwhelming operating income. Billionaire Paul Allen controls that company. The stock is down to $.15. Eighteen month ago, it was close to $5. Allen will get out while he can and sell to one of the other large cable companies. Charter recently said it is “exploring financial alternatives.”

9) Hovnanian (HOV) shares are down by 70% over the last year. Recently, the shares have been as low as $1.70, putting the company’s market cap at $171 million. The housing downturn may actually get worse as unemployment and foreclosures rise. The costs of credit default swaps on the homebuilder are way. JMP Securities recently commented that HOV is a “bankruptcy risk” due to debt and exposure in the hardest hit real estate markets. Liquidation with Hovnanian would probably be an auction of land and unsold homes.

TOP 09 VANISHING COMPANIES IN 09 – I

Year 2009 is the year of recession, in these tough times many companies vanishes while only few of them can resist the crises. Here are the lists of companies which will disappear in the year 2009. As per the research made by 24/7 Wall St. on some of the largest & well-known companies & listed down 09 companies which may disappear at the end of next year. These 09 companies are as follows:
1) Chrysler already says it will be out of business by early next year. But, what does that mean. It is unlikely that its largest shareholder, hedge fund Cerberus, is going to throw good money after bad in an economy where US car sales are dropping 30% compared with 2007 figures. But, the Chrysler brand could be around. So could the brand of its Jeep division. Foreign car companies like VW and Honda (HMC) would love to get well-known operations without the baggage of debt, UAW contracts, and dealer networks. Chrysler still has some popular models including it 300 series cars and it created the minivan. Jeep is regarded as the grandfather of four-wheel drive. Watch Chrysler Motors LLC go away and some of its products move into other hands.

2) Sirius XM (SIRI) has traded under $.10 down from a 52-week high of $3.89. Reuters has reported that “Sirius XM faces some $1.1 billion in debt in 2009. Of that, about $300 million comes due in February.” In the current credit environment, that probably won’t happen. There is a theory that falling car sales will undermine the sale of Sirius subscriptions. The company says that it does no better than break-even in the first year it gets a new customer though GM. But, a shrinking subscriber based is not good news for the satellite radio company’s future. Sirius will be out of business, perhaps before mid-year. Who picks up the pieces? The logical choices are a healthy car company like Toyota or a satellite firm like DirecTV.

3) AIG (AIG) may be the biggest mess of all the financial firms that the federal government has bailed out. Uncle Sam has given AIG $153 billion in loans. The theory is that the money gets paid back by the huge insurance company selling assets. Investors don’t seem very sanguine about that. AIG shares trade at $1.60, down from a 52-week high of $60.04. Congress seems less and less enamored of having a lot of money sitting in troubled companies. Watch for the new administration to get frustrated quickly and appoint its own people to auction off AIG divisions. Better to get something back than keep writing AIG checks.

4) Fannie Mae (FNM) and Freddie Mac (FRE) is two for one. They are both penny stocks, reflecting the fact that the Treasury has essentially taken them over, putting them into a conservatorship and pledging up to $200 billion to back their assets. With mortgage defaults rising, and home prices falling, that is not the end of the amount of money that the government will have to sink into the firms. Within a few months, the value of the common shares in the firms will be gone. The new administration may even decide that it does not need both companies. They can be replaced with some of their role going to the FDIC and the rest to one consolidated entity controlled by The Treasury Department which is already funding them.

5)vanishing companies trades at $.35 down from at 52-week high of $4.16. The pharmacy company has over 5,000 stores and Wall St. does not expect it to be profitable in the foreseeable future. The chain is a roll-up of the original company and Brooks and Eckerd stores which it acquired. With a debt load of over $6 billion, the firm is likely to falter. Competitors CVS Caremark (CVS) and Walgreen (WAG) would be happy to pick up the pieces. Rite Aid recently announced poor quarterly numbers and cut forecasts. (…cont)

DEBT COUNSELLING: AN INSIGHT- II

(…cont.)HOW DEBT COUNSELLING WORKS?

Debt counselors assess your requirements and financial status in totality and brief you about the cost involved. The next stage is to jot down the sources of income and outflows like installments of loans, intrest, insurance premiums etc. This centre helps you to restructure the outflows so that you live a debt free life. Banks are ready for settlement of loans as they want to avoid loans from becoming NPA’s. These services are free of cost.

TIPS TO GET OUT OF DEBT

  1. Firstly you should inform your spouse and parents about your debts.
  2. Keep minimum no. of credit cards. Give preference in repayments to those whose intrest rates & principal amounts are high and then other debts.
  3. Go for One Time Settlement (OTS) if the bank allows the defaulter to settle all dues in one time.
  4. If OTS is not possible restructure your loans, premiums. Draft a letter to bank stating your inability to pay EMI and asking for restructure.
  5. Transfer your debt from one financial institution to another which offers you low intrest rates and flexible payment options.
  6. In the worst case, if you have lost all money and do not have any source of income then file a petition in the court for insolvency. The court will take over all the assets and pay all your debts in pro-rata basis.

DEBT COUNSELLING CENTRES IN INDIA

There are various banks and financial institutions which runs debt counselling centers as a part of their ‘Corporate Social Responsibility’. Where as for customers it’s a ‘Goodwill Gesture’. The banks which provide these services in India are:

· Bank of India’s Abhay (http://www.bankofindia.com/abhay.aspx)

· ICICI Bank’s Disha Financial Counselling (http://dishafc.org)

· This site is an initiative of the Indian Banks’ Association, India Cards Council and MasterCard which offers free financial education (is http://money4you.in).

· Bank of Baroda’s (http://www.bankofbaroda.com/bgpk.asp) and many more banks.

CONCLUSION

It has been rightly said that ‘Money is the root cause of all evils’. Most of the people allow the power of money to control them. Most of the people have misconception that money solves all the problems. But in fact it accelerates the problems. If we ask people why we need money? The most common answers we find that they want to get rich or ‘I’m in debt so I need money’. Debt counselling centers helps you to have a sound sleep