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Merc backs Reggie

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Old 07-18-2003, 09:24 AM
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TulsaLarry
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Default Merc backs Reggie

WASHINGTON, N.C.--(BUSINESS WIRE)--July 18, 2003--Fountain Powerboat
Industries, Inc. (NASDAQ: FPWR) President and Chief Executive Officer Reginald
M. Fountain, Jr. announced the implementation of an $18 million long-term
financing arrangement with Bank of America, the proceeds of which are being
used by the company to refinance existing long-term debt, pay current
liabilities, and provide additional operating funds.
Fountain Powerboats has reported three consecutive quarters of operating
profit and is in the process of closing its fourth fiscal quarter ended on
June 30 during which it recorded strong sales. Mr. Fountain stated, "We
believe the results of our operations during fiscal 2003, combined with the
new financing, put us in a strong financial position going into our 2004
fiscal year."
The loan is secured by certain assets of Fountain Powerboats and Mr.
Fountain and has been guaranteed by Brunswick Corporation, a division of which
supplies marine engines used in the company's products.


Glad to see fountain get this loan to provide liquidy for the company and their dealers.
 
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Old 07-18-2003, 09:41 AM
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How do you make a million dollars in the boating business? Start with millions - borrow 18 million to keep going and sell to Mercury! Mercury Power Boats has begun! BH
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Old 07-18-2003, 10:08 AM
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Bajas with beaks for 2004?
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Old 07-18-2003, 10:16 AM
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Interest rates are down and now is the time to borrow money for whatever.
Merc will some day own Fountain because they want the location...Lake X be done soon.
Merc needs Reggie, I'd bet that Fountain sold more Merc HP motors than any other.
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Old 07-18-2003, 10:23 AM
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Quote:
Originally posted by Sydwayz
Bajas with beaks for 2004?
LOL!

I wonder if Brunswick has ulterior motives.
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Old 07-18-2003, 10:45 AM
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Um, I don't see too many guarantors on loans that do not have a stake in the company. I would have to think by this that Brunswick already has some ownership.

If they do not then what is their consideration for signing the guaranty and how could you enforce it in court if you received none? There is more to the story than meets the eye, maybe they do not have ownership, but then they must have some contract to purchase Fountain in place. Otherwise no consideration.

And yes, Fountain has in the past been Merc's biggest customer for motors with blue paint on them.
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Old 07-18-2003, 04:59 PM
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I bet if Reggie defaults, Brunswick will own the majority of the stock in Fountain Powerboats.

Is the company worth 18 million?
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Old 07-18-2003, 05:22 PM
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GO REGGIE!
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Old 07-18-2003, 05:39 PM
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Quote:
Originally posted by formulafastech
Reggie owns almost half (2.2 million of about 4.7 million outstanding) of Fountains stock. Depending on what their current debt is, I'd gues that Merc has first lienholder status on the buildings/land in NC. If they do own stock, its less than 5%, because it hasn't been reported. There were a bunch of stories a few years ago that Merc wanted to buy Fountain, without Reggie, but that they backed off because the public sees Reggie as Fountain boats
formulafastech, I believe you are right on except I would think Bank of America would have the first lien and Brunswick would have the first option in the event of default. There should be a SEC filing on this matter soon which will give more details about the loan and Brunswick's position. I'll keep my eyes out for it.
 
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Old 07-18-2003, 05:47 PM
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who knows
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