NU Online News Service, Jan. 17, 3:53 p.m. – Conseco Inc., Carmel, Ind., will discuss the actions it intends to take to strengthen its financial position within the next two weeks, according to Mark Lubbers, a Conseco spokesman.
“We are well down the path,” with steps already being implemented, according to Lubbers. However, he declined to describe those steps.
The Indiana Insurance Department says it has examined the Conseco plan and believes the plan is doable.
Lubbers says Conseco has considered options outlined in a report released Jan. 17 by Andrew Kligerman, an analyst with Bear Stearns, Inc., New York.
Kligerman predicts Conseco will be able to repay its $1.1 billion in debt obligations this year. He notes, however, that the finance unit may have trouble paying the expected $310 million to $340 million. If so, Conseco could have to make up for a $150 million cash shortfall, the analyst writes.
Kligerman says the extra cash the parent would have to generate would create a “cash hole” of $520 million, but that the company should be able to fill the hole using one of several options.
“Cash flow visibility in 2003 remains cloudy, however, and liquidity concerns could reappear,” Kligerman writes.
Lubbers says that what is clear is the reduction in the debt service that Conseco will realize in 2002 and 2003.