OTCPK:ARNBF - Post by User
Post by
rockman998on Dec 20, 2014 3:53pm
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Post# 23252892
The offer
The offerI doubt very much whether those owning the debentures will approve this. I suspect the bankers have initiated this in hopes of them becoming the only lenders. The common shares holders have no rights regarding debt.
Convert all the debentures to common shares, then the bankers will foreclose to get their $ 160 million. I think the debenture holders are a little smarter than that. At the end of the day they just want their money back and taking common shares isn't going to cut it.
I think there are a lot of bankers out there panicking when looking at the price of oil and they see the debt to cash flow for a lot of their oil companies going from 2:1 to 4:1 or greater and who knows for how long. Generally this isn't just Arcan's problem, $60 oil doesn't grow anyone's balance sheet.
If $60 oil persists there will be alot of other companies in same boat.