Zargon Oil & Gas Ltd ZARFF

if SP is at 0.05 now, why Debenture-holders will accept 0.1?

[mingzhu]

800 m shares delution at 0.05 instead of 420 m  may come.

[rimbus]

This post has been removed in accordance with Community Policy

[pablo87]

"The rules of the Toronto Stock Exchange (the "TSX") require the exchange price to be at market. The price of $0.10 per Common Share underlying the proposed Transaction represents the volume weighted average trading price ("VWAP") of the Common Shares on the TSX for the 5 trading days ending November 20, 2018, in accordance with the TSX definition.

[rad10]

exactly - and that is why a "no" vote makes sense.  Get a year of interest in cash, dilute the shareholder base and receive a higher percentage for the principle in diluted stock in December 2019.   The simplistic view that the debentures are trading at 40 cents on the dollar is not the whole story.  The notes are very illiquid.  The calculation is based on the

[nkbourbaki]

I was just reading through the indenture.  Getting the interest payments in cash by selling shares wouldn't be easy or efficient IMO.  Who's going to bid for those shares in quantity? 

[pablo87]

My gut on this Saturday morning is telling me to vote NO. The reason is not to lose our priority until we are absolutely forced to (which we will be at Dec. 31 2019).  This was my experience with TBE - being a debentureholder saved the day - and my experience with PXX - got bent over being a shareholder.

[mingzhu]

that is what i meant. debentureholders will not accept 0.10, then ZAR  comes with 0.05, SP drops to 0.03. This is a vicious spiral. 7 years ago it was at $28. it is unbelievable.