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Mega Brands Inc MBLKF



GREY:MBLKF - Post by User

Comment by FFHwatcher1on Sep 24, 2012 4:26pm
699 Views
Post# 20408247

RE: RE: warrants

RE: RE: warrants

The only other thing that I would add is that it takes 20 warrants to buy 1 common share.  Therefore, $0.18 x 20 = $3.60 is the actual warrant price.  Therefore, $10. + $3.60 (warrant cost to buy one share) = $13.60 , meaning that the price of $13.60 is the current buyers breakeven.  March 2015 is the expiry and all the proceeds are used for debt repayment.

Also, I believe MB bought back some warrants to reduce the dilution?  Maybe my memory is off here but if the price can get over $10 by March 2015 and all the warrants get exercised (and 10-12M shares get issued), than MB will get in the neighborhood of $100M+, all used to pay off their Long Term Debt.

Their financing could get creative if they get some internal cash generation and start paying down long term debt or perhaps buy back (more of) those warrants, or get in $100M, pay off long term debt and turn around and buy back shares?  (please don't do an acquisition!!).

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