How dilution helps CMK survive Everyone from the company praised the restructuring by Marret for having secured liquidity for the company(Stone) but hardly anyone made it plain to the common folk. To understand the how one must understand the corporate structure of a company. Marret after the dilution will own 64% cent of the company. Now if the company can not go into production Marret has no choice but to auction the company and take its money. But if the company manages to go into production, even under the ownership of Marret, and becomes profitable, the profit will accumulate in CMK as earnings and shareholders equity. This money does not belong to any shareholder in particular but to all or the legal entity called CMK. Now CMK , the company, can decide to buy out one of the shareholders with the money it has in the kitty. And in this case can buy out the Marret shareholders with their 2billion shares. Take the shares and destroy them. The bondholder/ now shareholders don't want to be in the coal business and only want to get their money and get out. They will have therefore the opportunity to sell their shares to CMK, get their money and go. As for the second tranche of bonds, the current shareholders will have the opportunity to exercise the warrants that will be given to them in the next three years. During that time the company hopes that it will be in full production and both with money from the exercise of the warrants and the profits from the sold coal will be able to pay off the bondholders and be debt free. This assumes in both cases that Marret does not want to be in the coal business and they only want their money and go. The company can buy them out in both cases and reduce the float down to what is today. This however will need time to play itself out for the next 2 to 3 years.In case in the next three years the company will not go into production, then the total shares owned by Marret will give them 95% ownership, sell the company, and get their money and whatever is left, the 5% will go to the current common shareholders, which will be virtually nothing. But if the company is sold today at a certain price, say a $, and also the buyer undertakes to pay the debt, so much the better. We all take the money and go. But if not, we may have to wait 2 to 3 years to get our money and hoping the company will go into production and be profitable. And always there is a third possibility the Marret shareholders might sell their shares to a third party which is in the coal business and also sell the debt to get their money and the rest of us will be minority shareholders in a new entity. This is another scenario which might be considered. But the best would be sale of the company, but that is not a sure thing.