SeaWorld Isn't Paying All Its Bills

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warfelg

Advisory Panel
Mar 16, 2016
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The reporter's angle or the news they bring? Both have merits for scrutiny.
Both. The reporter seems to be trying to paint a grim “no recovery” picture. But the news they bring sounds like it’s almost intentional to drive towards bankruptcy.
 
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Oct 7, 2011
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So many sources of uncertainty... article quoting a guy quoting other people seemingly watching the process from afar. Yet some circumstantial evidence aligns. Hard to know what to suspect and/or anticipate.

I do keep coming back to the number of incredibly damaging and short-sighted things I have seen done to companies, solely to benefit a big private equity-style stakeholder. Which this is.

But that's not proof. More just a hook to say "hedge fund ownership, private equity model, it was obvious" in retrospect.

😁, but more than that, 😕.
 

Alf33

Life is short, so eat dessert first.
Jun 8, 2013
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There have been a lot of cases where private equity firms have bought their way into successful companies and totally ruined them. In other cases they've helped the company they invested in. Not sure which way this is playing out with SEAS. The fast turnover of CEO's the last few years is not encouraging. But time will tell how things go.

What is puzzling to me is that seeing that SEAS got the loan to help them cover their costs through the end of the year then if the news is correct where they've not been paying their vendors why aren't they? If they have the money then they should start paying their bills and make your supporting vendors happy and repairing that relationship. Besides that it's probably costing SEAS money as I'd have to believe that most of the invoices have past due interest clauses in them so not paying them just amount to a higher invoice due to interest being added by the vendor for it being past due. Yeah, their costs are going back up due to the reopening of some parks at levels where they may be barely profitable but this shouldn't be a reason to continue to not pay your bills.
 
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Apr 16, 2017
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SEAS is a puzzling mystery. They seem to beat death at every turn. Perhaps SEAS is ironically like a cat with 9 lives.

Honestly, the situation seems dicey to me right now. Some people brought up good points about SEAS being on the up and up prior to the pandemic. However, throughout this pandemic they actually appear to be in the worst position. It truly wouldn't surprise me if some corporate entity were to try and push SEAS towards bankruptcy. Someone is going to end up with money in their hands, and it isn't gong to be SEAS. I honestly think, the chain is just being used as leverage for a grander scheme to get someone else rich. I'm not pointing fingers, buuttt . . . you can make some observations on your own accord.
 
Nov 30, 2018
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There have been a lot of cases where private equity firms have bought their way into successful companies and totally ruined them. In other cases they've helped the company they invested in. Not sure which way this is playing out with SEAS. The fast turnover of CEO's the last few years is not encouraging. But time will tell how things go.

What is puzzling to me is that seeing that SEAS got the loan to help them cover their costs through the end of the year then if the news is correct where they've not been paying their vendors why aren't they? If they have the money then they should start paying their bills and make your supporting vendors happy as repairing that relationship. Besides that it's probably costing SEAS money as I'd have to believe that most of the invoices have past due interest clauses in them so not paying them just amount to a higher invoice due to interest being added by the vendor for it being past due. Yeah, their costs are going back up due to the reopening of some parks at levels where they may be barely profitable but this shouldn't be a reason to continue to not pay your bills.
My guess is that even though the parks are open, SEAS is still bleeding money on the bottom line which is why they are stalling vendor payments. Their thinking may be that If they pay off the vendors now they could go illiquid again in a few months with nobody willing to finance them further under those circumstances.

Its definitely unseemly from a business relationship and ethics point of view, but may be their only survival option. Unfortunately those vendors may not be willing to work with them in the future without better contract terms, which will end up costing SEAS more for new projects.
 

Alf33

Life is short, so eat dessert first.
Jun 8, 2013
620
1,416
93
Chesapeake, VA
My guess is that even though the parks are open, SEAS is still bleeding money on the bottom line which is why they are stalling vendor payments. Their thinking may be that If they pay off the vendors now they could go illiquid again in a few months with nobody willing to finance them further under those circumstances.

Its definitely unseemly from a business relationship and ethics point of view, but may be their only survival option. Unfortunately those vendors may not be willing to work with them in the future without better contract terms, which will end up costing SEAS more for new projects.
While this is true the ironic thing is that SEAS currently has a long term debt of almost $1.8 billion per the last quarterly report. I would have to think that with what was an improving economic situation they were experiencing that getting another loan above the one they just got should not be a problem. Now paying the debt back???
 
Apr 16, 2017
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If SEAS doesn't pay their bills, why would anyone want to loan them money or invest in them? Seems like a loosing situation. If they are able to continue paying their bills, but do so in a manner that keeps some debt, at least that would show they do have some sort of payback or payoff ability.
 
Nov 1, 2019
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If SEAS doesn't pay their bills, why would anyone want to loan them money or invest in them? Seems like a loosing situation. If they are able to continue paying their bills, but do so in a manner that keeps some debt, at least that would show they do have some sort of payback or payoff ability.
Is this basically the reason the Fed is buying all this debt right now, since no one else really wanted to? Maybe I'm misunderstanding/oversimplifying.
 

warfelg

Advisory Panel
Mar 16, 2016
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Is this basically the reason the Fed is buying all this debt right now, since no one else really wanted to? Maybe I'm misunderstanding/oversimplifying.
Over simplification of it but the host is to not lose businesses in debt to foreign entities.
 
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