RE: RE: RE: RE: RE: DebenturesTannin, you are correct, technically the creditors cannot simply force a bankruptcy if all aspects of their financing deal is being met, which I assume at this point, it is. How they could do it is since they have the right to restrict where AG's cash flow goes and any new financing it attempts, if they felt a bankruptcy was in their best interest, they could achieve it by restricting the refinancing of the convertibles. In that case, it would be you that forces AG.UN into bankruptcy.
Now that the above has been said, what are the likely scenerios. Well AG.UN is certainly worth more as a going concern then in a liquidation. Let's face it, it is very profitable and a fairly easy business to understand and has some pretty good barriers to entry. The problem was management's over reliance on debt, it's big mistake in thinking that convertible debentures were the same as equity and it's unfortuneate timing of having to refinance a whack of all this debt during the peak of the credit crises, and then consequently being played like a $2 fiddle by these new creditors.
I would like to think that these new creditors are happy with their LIBOR plus 10% and their senior position to everyone else, and would therefore allow the refinancing of these debentures. That would give you your 100 cents on the dollar and if you like a much better conversion number going forward. It would also snooker the existing shareholders almost completely with dilution, but as I said before, management gave away their company when they refinanced the last deal, they just didn't tell them. So that being said, I would rather hold the convertibles then the common.
However, who knows what the plans of these creditors are. Perhaps they see a way of forcing a bankruptcy, sending the common shareholders their share certificates to be used for wallpaper or bathroom tissue and perhaps convincing you guys to go away by taking 50 cents on the dollar. When all of that is done, they would have in their hands a very profitable company acquired at maybe 3 or 4 times earnings. Not sure how or if they can do it or even if they plan to do it, but if they wanted to do it, that is how a bankruptcy would be implemented.