Georgia Gulf on the Precipice of BankruptcyGeorgia Gulf's (GGC) lenders have agreed to again extend a debt deadline, but it may be forced to file for bankruptcy if it loses further access to funding. The deadline has been extended until July 15.
Georgia Gulf has been trying to gain support from its debt holders to exchange their debt for common stock, which could help the company avoid bankruptcy. It said less than $30 million of its debt had been tendered so far, out of $800 million outstanding.Currently, $34.5 million of interest payments are being withheld. Georgia Gulf also said it was withholding payment of $3.6 million of interest due on Monday on a group of 2013 notes and that it has a 30-day grace period before the holders of those notes can seek remedies. Read the full analyst report ...

ÊOPPORTUNITIES

The industry is divided into commodity chemicals (45%) and specialty chemicals (55%). The commodity segment tends to be more concentrated.

In the commodity segment,Êcost reductions, improving yield from better technologyÊand economies of scale are important. In the specialty segment, margins are higher due to better pricing and more efficient operations. Demand for fertilizers is driven by crop prices that are high levels.

At these levels, fertilizer demand should be steady at worst, and with reduced capacity, prices should stay firm. TheÊuse of ethanol for fuel is also keeping prices high.

The chemical industry is a large consumer of oil, natural gas and energy. Raw material costs have been at historically high levels, which was a very serious challenge for the chemical industry. However, oil and gas prices are falling, and this could provide a temporary windfall for the next 6-9 months.

Many chemical and fertilizer companies have excellent balance sheets and cash flows.

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OPPORTUNITIESThe industry is divided into commodity chemicals (45%) and specialty chemicals (55%). The commodity segment tends to be more concentrated.In the commodity segment, cost reductions, improving yield from better technology and economies of scale are important. In the specialty segment, margins are higher due to better pricing and more efficient operations. Demand for fertilizers is driven by crop prices that are high levels.At these levels, fertilizer demand should be steady at worst, and with reduced capacity, prices should stay firm. The use of ethanol for fuel is also keeping prices high.The chemical industry is a large consumer of oil, natural gas and energy. Raw material costs have been at historically high levels, which was a very serious challenge for the chemical industry. However, oil and gas prices are falling, and this could provide a temporary windfall for the next 6-9 months.Many chemical ...

Zacks #3 stock Schlumberger (SLB) is in oversold territory today and has a stochastic value of 5.30. Shares of the leading oilfield services company are down 4.06% since the opening bell.Georgia Gulf (GGC) remains oversold with a stochastic measurement of 2.706. However, the Zacks #2 stock has rebounded 3.15% since the morning and is trading at $2.36. "SLB" Free Stock Analysis: Buy? Sell? Hold?"GGC" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

Georgia Gulf (GGC) is a leading North American manufacturer and marketer of two integrated chemical product lines, chlorovinyls and aromatics. The company is suffering from potentially overpaying for Royal Plastics, a company that makes vinyl-based housing products. The $1.5 billion acquisition resulted in an equal increase in debt. The company recently renegotiated its debt compliance (leverage and interest coverage) ratios, as the company is in danger of non-compliance.Also, Georgia Gulf saw high production cost due to volatile energy prices. The company was unable to recover costs by increasing prices of its products. Prices for natural gas (the key input) are increasing, which is negating the impact of product price increases. This has compressed margins for the company. Natural gas prices are expected to rise further, stemming from strong US consumption, low inventory, and limited drilling activity.Georgia Gulf's end markets are primarily housing related. Until ...

Tontine PartnersTontine Capital Partners - Holding AnalysisThis post is being written as part of HedgeFundBlogger.com's Investment Securities Tool which analyzes the holdings of hedge fund managers.If you're unfamiliar with Gendell and his Tontine Partners, then here's what you need to know. Founded 11 years ago, Tontine is a $10 billion fund ran by Jeffrey Gendell. He specializes in macro investing and takes very large, concentrated positions in companies he feels will benefit from those macro themes. Additionally, he will take on an activist role when necessary, to ensure shareholder returns. The fund has posted returns in excess of 100% in both 2003 and 2005.So, let's get right down to it... what was Jeffrey Gendell ...