RE:RE:Value of U debenturesStratocheif wrote: I think its a done deal. Most of this debenture is held by funds and they will vote for it because thats what they want. They probably assesed the risk here and decided they wanted some of thier money back. For ivq its a bad deal but they probably had no choice. If you had 12000 there and got 600 a year interest after the change you still get 600 a year and you only have 9300 or so tied up there. Ivq still has the high interest expense and 10 million less cash on hand. The reason the debentures are down so much is some people want out and i dont blame them. Ive had many like these....some went to zero. When you buy a debenture you expect your money back at end of term. When they start this shinannagence its a sign of possible trouble. No one wants that. Id be out too but i bought 5 years ago at 96 so im not happy to take a loss like that. I'll stay on and hope for the best. At least i got 5 years of interest and now i get 22% of my money back and still get the same interest payment
Nope, I checked and the two main funds don't hold a single debenture. There ain't no holders above 10% either. They say in the prospectus that if they receive 66% early, they will cancel the meeting. If it was a done deal, it would already have been announced.
For IVQ, it's a really sweet deal. If they went to the market, they would have to offer new debentures at 8% and $3 conversion.
Also, they could issue stock at 95% which would then cost no interest forward and let current debenture holders get more than 80/100.
Plus, if it was an offer made in good faith, they would have an external advisor assess the offer (and compare it to market), which they didn't make. Btw, they should have the cash to pay for the debenture in full, it just would leave them close to zero, which they want to avoid.
So, vote against the motion if you unless you're happy to accept a devaluation of 20% because they can't set decent terms. 300% conversion rate is a joke that nobody should accept.