Arcan Resources Ltd ARNBF

RE:RE:RE:RE:RE:RE:RE:teevee, debenture redemption

[teevee]

rad10 wrote: guys - there are other options at maturity.  With a 2/3 majority vote the debenture terms can be amended.

Typically an increase in the interest rate, a consent fee, and / or a reduction in the conversion price are offered in exchange for lengthening the term of the loan.

Bondholders will often accept a combination of the above - because the alternative is worthless diluted penny stock.  28th of February 2016 - is not the doomsday scenario that seems to cause so much concern.

I believe the reason why the debentures traded at 50-60 cents on the dollar before the offer on the table, is because the market believes that is all they are worth after satisfying the secured lenders/banks. If so, there is nothing to renegotiate as the offer on the table for the debentures a significant premium to market. I agree the unsecured debentures rank ahead of shareholders, however, in this case, shareholders are also entitled to a vote, so had to be thrown a bone even though shares are essentially worthless. Can you imagine the outrage of debenture holders if they voted in favor, only to see the deal fail because shareholders voted against? It seems a few debenture holders here don't understand that, and are hell bent to vote against only to see the market for debentures to go back to 50-60 cents on the dollar,  then become worth less as ARN continues to deteriorate, and finally, get paid in shares at redemption. I think we all know how weak the market would be for all that diluted paper. Go figure?