Arcan Resources Ltd ARNBF

FP Article

[mathwhiz]

https://business.financialpost.com/2014/07/25/arcan-resources-ceo-defends-deal-with-aspenleaf/ My favorite lines from the FP article with McCoy: • But they paid 100 cents a few years back: “You are correct on that.” • But don’t the debenture holders have a contract too? [declined to answer]

[rad10]

Hilarious but  true - at the end of the day the assets are around 610 million, the liabiliities are 380 million.  I am happy to load up on these debentures when the proposed deal falls on it's face as it will...............  Paid to wait and happy to sit things out.  it is the nearest a regular Joe gets to being a loan shark.

[jd43xl]

You make a good point, rad. I might join you in buying those debs.

[teevee]

JD, If  you are long the debentures, why not sell now and buy back at a much lower price after the deal is voted down? 

[jd43xl]

As I replied to rad, that may be the plan. I certainly wouldn't be holding the debentures, as the limited upside is offset by the risk of a lower price after the deal is rejected. But down the road, the debentures is the thing to hold.

[rad10]

Fair points JD - but debenture trading is expensive.  I was tempted to press the eject button after the deal was first announced, but I have nowhere better to park the funds.  My brokerage charges 25 bucks for the first 25K face value. Something is going on with the ivanhoe debentures.  They have been walked down and TD is loading up with very high volume turnover.

[jd43xl]

I trade debs for ten bucks, so no problem trading at that price.

[perdikaoilgas]

I think the transaction with Aspenleaf should be expected, given Arcan's high debt. This is the typical end for the heavily indebted companies.

[perdikaoilgas]

According to that article, the CEO defends the deal of course BUT hopefully he will learn the lesson and he will not load the new entity with a ton of debt again. ARN reminds me of Second Wave Petroleum.