GREY:ZARFF - Post by User
Comment by
Methodon Nov 25, 2018 10:30am
46 Views
Post# 29018714
RE:Revised Proposal
RE:Revised Proposalrad10 wrote: I 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
i don’t think this proposal makes any sense since you would still have to have a debenture holder vote to change the indenture agreement to allow a PIK payment and you would also likely have to get a shareholder vote approving the dilution. This would cost money and not really solve any long term issues so not worth the cost.
But maybe you are just trolling.