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More like you borrow money to buy a business and use their money (and projected income) to pay back the debt you made to buy the businsess.
by number6 9y ago
More like you borrow money to buy a business and use their money (and projected income) to pay back the debt you made to buy the businsess.
- vkou 9y agoIt's kind of like taking out a mortgage to buy stocks, or, these days, bitcoin, and then expect to pay it off with dividends and appreciation.
- astrange 9y agoExcept that would be your problem to pay off, but here they get out of it and the seller(!) ends up responsible.
- pjc50 9y agoSimilar to Maplin: http://www.coppolacomment.com/2018/03/the-sad-story-of-maplin-electronics.html http://www.coppolacomment.com/2018/03/the-sad-story-of-mapli... Note the use of an elaborate corporate structure which involves a company paying its parent company 16.5% (!) on debt.
- ascagnel_ 9y agoWorth noting here: TRU was paying about that much (~$400MM/yr on $5B) on its debt as well.