step one...a good deal I see this as the company making the very best of a bad situation. And I imagine this is only one step towards securing the company's future.
The fact is, the convertible debt overhang with its very restrictive covenants and imminent dilution was a real problem. Recall Pierre said he had a "deal in hand" when they originally did the Convertible...the intention was to repay a significant portion of the debt with the proceeds of this "deal" and avoid the conversion and dilution.
That was right around the time that the Hemosol / Melnyk deal fell thru . The way I understand it, PLI and Melnyk had a substantial deal in place that involved $10+mm of licensing up front. Hard to fault Pierre on that one falling thru.. Melnyk basically tried to leverage PLI in court... and lost...but Pierre was left needing money. I had even heard some concerns about adversaries potentially trying to buy the convertible debt from noteholders and then use it to leverage Prometic with the restrictive covenants and risks of dilution.
Now, with JP Morgan's help, it seems that Pierre has been introduced to a whole new set of very interested and solid US Institutions. And with the recent string of nice deals and announcements, I wouldnt be at all surprised to see some Canadian Institutions getting back involved.
I am willing to bet that we see a significant equity issue in the next couple of weeks that would ultimately solidify Prometic well into 2008 . This debt restructuring alone doesnt give us enough capital. And while its tough to see more dilution, the most important thing is to get good, solid, long term investors involved, not Hedge funds and flippers that have had a death grip on this company for the last two years.
If this all plays out right, then we will get a good bunch of solid new investors with a long term view. Investors that understand the need for after market support and vision. If we follow with a good flow of deals and partnerships... and FINALLY some execution on the long awaited initiatives that seem to be maturing... then we may very well be on the march back to respectability.
Imagine if we could get a string of substantial Gel deals like the one announced yesterday !? Isnt that what we all bought into 4 years ago ? If Novartis, Nabi, GLAXO etc all step up to some degree in the coming years.... AND we have filter sales... AND we have Catalyst / Hemosol resolution AND we have 1402 / 1393 etc... then wow .... perhaps we will actually reach cash flow positive and have a real and sustainable company.
Hopefully the aggressive Hedge Funds will go elsewhere and pick on another company.....and we will truly see the return of institutional interest. As I said a few weeks ago at 25 cents, this may be the best risk / reward point EVER in this company....and today might have even made it better
we'll see