GREY:ZARFF - Post by User
Post by
rad10on Nov 24, 2018 6:32pm
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Post# 29018090
Revised Proposal
Revised ProposalI am going to propose to the board that debentureholders receive a PIK in stock for the March payment in order for the company to buy time. The interest liability in March 2019 is 1.68 million. A PIK would have to come at a premium to the VWAP of the common stock nearer the time.
it will be difficult for the company to sell stock on the open market to fund the interest obligation in cash.
Typically a PIK carries a 50% premium so assuming the stock price remained around 5 cents - debentureholders would receive around 50 million new shares in Zargon. This would slow the dumping into the open market, and would preserve debenture seniority.
There is no rush to convert the debentures.
i hope this can help the situation.
cheers
Rad10