RE:RE:RE:RE:Debsalkhor wrote: Here is something from the debentures prospectus.
Subject to required regulatory approval and provided that there is not a current Event of Default (as defined herein), the Trust may, at its option, elect to satisfy its obligation to pay all or a portion of the principal amount of the Debentures on redemption or at maturity together with accrued and unpaid interest thereon through, in whole or in part, the issuance of freely tradable Units on not more than 60 days and not less than 40 days notice, by delivering that number of Units obtained by dividing the principal amount of the Debentures, together with accrued and unpaid interest thereon, by 95% of the Current Market Price. Further particulars concerning the interest, repurchase and maturity provision of the Debentures are set out under “Details of the Debentures”.
What this means is the interest on the debentures can be paid in new trust units, which at 2 cents a unit (unit price will fall if this option is announced) then there will be an additional 97.5 million shares issued making the debenture holders owning 2/3 of the company at the end of December. Assuming the company continues as a going concern, this could happen again every 6 months until June 2017. At that time the principle amount of the debentures can also be paid in new units, which is meaningless by that time as the debenture holders will already own 99.9% of the company so they will just end up with 100%.
Alkhor, I beg to differ on your intepretation of the paragraph as presented under the heading,
Payment of Principal Amount and Interest in Units in the Short Form Prospectus that was issued on April 4, 2012!
I believe that one has to first consider the paragraph before it,
Optional Redemption, which is also on page 7 before the
payment of principal amount and interest in units clause would or could be activated!
In essense, after June 30, 2015, the Trust can/could only redeem before the Maturity Date if the current Market Price is 125% above the Redemption Price! Since that is certainly not the case, the trust can neither redeem any debentures nor pay interest owing in trust units before the Maturity Date. Instead, the Trust is still obligated to pay the interest in cash until the Maturity Date.
Joe, I also beg to differ on your post today concerning a NCIB!
Under the heading,
Purchase for Cancellation on page 8 of the same Prospectus, the Trust can at any time purchase the debentures in the open market at any price for cancellation.
Sorry Joe.
So folks, it does looks like Parallel is indeed buying up their own debt at pennies on the dollar! Keep in mind that under the heading,
Change of Control also on page 8, anyone who buys the company would also have to purchase the Debentures or remaining Debentures at 100% of the debenture principal amount plus accurred and unpaid interest.
Kherson