BGI — financial distress indicators
Financial-health summary
BGI's reported numbers place it in the 'Very weak' financial-health band (distress score 100/100). The main indicators are liabilities exceed assets (negative equity), operating profit does not cover interest and market-implied default probability >20%. Independently, the Ohlson accounting model puts its 1-year failure probability at 91% and the market-implied (Merton) default probability is 98.2%. In its favour: operating cash flow is positive over the latest 12 months.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Total liabilities are 1.10× total assets.
Balance-sheet insolvency test: debts exceeding the fair value of assets is the statutory definition of 'insolvent' in 11 U.S.C. §101(32).
Interest coverage (EBIT / interest) is 0.38×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Merton distance-to-default -2.10 σ → PD 98%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Total debt is 15.8× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
Operating cash flow negative in 2 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
Price is -83% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
O-score 2.36 → model probability 91%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Current ratio is 0.88.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Last price $0.22.
Below the $1 minimum-bid listing standard (Nasdaq Rule 5550(a)(2) / NYSE 802.01C); sustained breach leads to delisting and loss of capital-market access.
Short-term debt is 88.8× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- Revenue still growing (+16% YoY).
- High insider/promoter ownership (75%) aligns management with survival.
📰 Recent news scan
- When the Price of (BGI.UN) Talks, People Listen (BGI.UN:CA) - Stock Traders DailyGoogle News · 2026-10-08
- Brookfield Global Infrastructure Securities Income Fund (TSX:BGI.UN) Rises 1.99% on October 8, 2026: Why Investors Are Watching the Stock - kalkine.caGoogle News · 2026-10-08
- Birks Group (OTCPK:BGIC.F) - Stock Analysis - Simply Wall StreetGoogle News · 2026-08-29
- Birks Group (NYSE: BGI) details 2026 supply-chain labour review - Stock TitanGoogle News · 2026-08-24
- Birks Group Inc. (BGI) Stock Falls on Quarterly Earnings - Quiver QuantitativeGoogle News · 2026-07-21
- Birks Group (BGI) Stock Analysis Report | Financials & Insights - Benzinga FranceGoogle News · 2026-07-03
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do BGI's financial-health indicators show?
As of 2026-10-09, BGI's public financial data places it in the 'Very weak' band with a distress score of 100/100, driven by liabilities exceed assets (negative equity), operating profit does not cover interest and market-implied default probability >20%. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is BGI's financial distress score?
100/100 ('Very weak'). Ohlson O-score 2.36 (model 1-year failure probability 91%). Merton distance-to-default -2.1 σ (model default probability 98.2%).
What works in BGI's favour?
Operating cash flow is positive over the latest 12 months. Revenue still growing (+16% YoY). High insider/promoter ownership (75%) aligns management with survival.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other Unclassified companies with distress indicators
- ADSE (ADSE)Very weak 100/100
- AIIO (AIIO)Very weak 100/100
- AKAN (AKAN)Very weak 100/100
- ATCX (ATCX)Very weak 100/100
- BNRG (BNRG)Very weak 100/100
- BRNX (BRNX)Very weak 100/100
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.