Conversion of debentures to commonFollowing this dividend we expect an adjustment to the conversion price of the convertible debentures, reducing it to $14.10.
With the commons trading roughly 4% above the conversion price it would be beneficial to have the debenture holders convert and then sell their shares. this is likely keeping a lid on the share price as algoma just reported their best 1st quarter EVER. And they will have some new ships setting sale in 2024.
With the debentures at 5.25% this means the company will be saving this interest - which will go to the commons of course. When companies trade at a steep discount to book ($14.67/20.14 this is an added benefit as the earnings benefit will be enhanced.