Mega Brands Inc MBLKF

RE: RE: RE: On the mend

[FFHwatcher1]

It was part of the warrant issue.  They HAVE to repurchase the debentures with the warrant proceeds.  No options.  It is not optional.  It doesn't matter whether it is a good idea or not.  If share price is above $9.95 in March 2015, MB will issue new shares to warrant holders for $9.95/share for every 20 warrants.  Proceeds have to be used to repay debentures leaving virtually no long term debt plus some cash left over.   It is possible that MB continues to repurchase 10% intererst rate debentures over the next 2 years saving interest costs over 2 years. 

Is it better to buy back warrants?  $0.13 x 20 = $2.60 + $11.30 share price = $13.90 equivalent/share.  Probably best to repurchase debentures?  

 

Any opinion on this anyone?