RE:PETRUS DEBT AND REFI? I have been a shareholder for over 5 years (trying) to follow where Don put his money. I have made money with him at PEY a few times over the 20 years I have followed that company.
What you must be aware of are the Risks associated with investing.
What the lawyers and the brokers do, to mitigate THEIR liabilities and exposure, if things go wrong, is to pepper, liberally, the issue Prospectus with every conceivable possible, known as well as unknown, Risk and/or Bad Ending laying them all out there for everyone to read, if you are so inclined.
So very often this makes for disconcerting reading!
The points mentioned in your Q with respect to the just closed debt refi are no different.
Nothing that offers me cause for concern and considering these additional points:
In late 2020 and all through 2021 up until the Grays announced they had bought PRQ debt from Macquaries Bank and would refinance it for new shares, PRQ was MONTHLY, announcing "extensions" from its Lending syndicate, over and over again. This, along with radically curtailed drilling and a dropping production profile, killed the stock.
The word was that PRQ were in a death spiral and facing bankruptcy.
In that framework and with confidence the Chairman could fix this, at one point, I put a whole year's worth of PRQ shares at 9c/share into my TSFA account.
Then last fall PRQ announced the series of financial endeavours which right-sided the balance sheet, radically reduced debt and gave the company a new CEO (another Gray sibling) and a moderate budget to finally go drilling again.
The 4 Gray brothers now own close to 80% of the company so do you see them getting pushed around by a Lending syndicate? Really? I very much doubt it.
Lastly, if they were so desperate for (more) cash, then why not just announce the adding of a 15% Green Shoe?
Or even still, simply SUPERSIZE the Rights Deal making it a $40MM one instead of a $20MM one?
And, btw, they could very much have done any of these things as the Rights Issue was a non-brokered one, so no 3rd parties with different and possibly much more greedy agendas to be listened to.
In closing that deal, PRQ announced on 02 May that "the basic and additional subscriptions totalled 184 per cent of the common shares of ie company available through the rights offering" meaning it was almost 2 x oversubscribed.
So there is the evidence it could have been almost doubled... yet the didn't.
PS: I subscribed for all of my Rights shares. Further, suspecting there would be an overwhelming demand for MORE and only once you had fully subscribed for your original shares allowable, I came to the view that leaving the desire for a larger allocation faced a slim to nil chance of being granted, I decided to buy more PRQ.RT rights shares in the market such that I effectively doubled the Rights allocation initially granted me.
That decision proved to be absolutely correct as the Company announced "The rights offering received overwhelming support from the company's shareholders with 97 per cent of the rights available under the basic subscription privilege being exercised" going on to say "a total of approximately 400,000 common shares were issued pursuant to the additional subscription privilege granted under the rights offering, of which, to the knowledge of the company (after reasonable inquiry), approximately 300,000 common shares were issued to insiders of the company and approximately 100,000 common shares were issued to non-insiders of the Company."
So only 100,000 extra shares were available to ALL non-insiders COMBINED... mmmm, they wouldn't go far, would they?
Given all of the above plus the very difficult to change macro tailwinds helping NatG producers, I am now more excited about PRQs prospects than I was 5 years ago buying over $3/share.
As always, please note this is all just IMO so do your own DD.