Debenture holders will shoot themselves in the foot if they don't accept this deal at C$0.10
First they will convert their debentures into shares at C$0.10 at full value, there is not a haircut.
Second they will receive ZAR's common stock either they accept this offer today or upon maturity of the debentures in December 2019, they will not receive cash in December 2019:
"The Debentures mature on December 31, 2019. The Company intends to settle the Debentures in Common Shares upon their maturity if the proposal to the Debentureholder is not approved in accordance with existing terms of the Debentures." The difference is that if the debenture holders accept this deal today, they will allow ZAR to breathe because they will help ZAR save C$4.20 million in annual interest, which can be used as CapEx to increase the oil production in 2019.
This is how ZAR will buy time to sell itself (outright sale) or gradually sell its oily assets to another company at higher oil prices in late 2019.
Enbridge's Line 3 comes in service in Q4 2019 and all say that oil differentials will narrow a lot.
So they will benefit significantly from the rise in ZAR's common stock in the future when ZAR's production rises and oil pricing improves in 2019 given that they will buy the common stock today at just C$0.10:
- "Pro forma debenture interest burden reduced by approximately $4.20 million for the 15 month period ending December 31, 2019, resulting in increased cash flow available to actively invest in low risk oil exploitation capital projects and enhance the Company's net asset value;