The outage will no doubt cost Allegiance big bucks, and the service provider is already in financial hot water. "A big swath of people have been affected by this," says Kevin Mitchell, an analyst with Infonetics Research. "Its not good timing for the company."
Allegiance was supposed to reduce its loans to an agreed $645 million by April 30, but it failed to do so. Miraculously, it won a reprieve from its lenders, which extended the deadline until May 15.
"They are in a tight spot -- after paying $5 million to extend negotiations with the bank for this extra time, it still doesnt look good, says Cannon Carr, an analyst with CIBC World Markets. Its very difficult to do, but its in the banks best interests to make this work, as its not clear how much the company is worth at this point. He adds that a likely possible outcome is a bankruptcy filing.
Allegiances share price rose 14 percent today, reaching $0.35.
Jo Maitland, Senior Editor, Boardwatch
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