RE:RE:RE:RE:seems there is alot of confusion going onYour right, it appears the conversion doesn't happen unless there is no sale. I had assumed that the conversion happens regardless. It seems that the noteholders may have the ability to get full repayment in a sale.
The process appears to be:
1) Try to sell the company.
If this happens, the notes and sandstorm don't convert, but the get repaid in full. Whatever is left goes to shareholders. In this case, you need approximately ~$200 mm purchase price prior to the shareholders getting anything.
2) Can't sell the company, restructure the debt & sandstorm into equity. Inject more equity to try to get closer to production/derisk. Equity holders get 1.7% of the new-co, potentially diluted more
with additional financing.
So there may be some small chance of equity holders getting a payoff in case 1.. But I contend that case 1 is better for the noteholders because they could get full repayment instead of a haircut down to 30 cents on the dollar.
From the press release:
Subsequent to the court order referred to above, the Company intends to pursue a dual track process of: (a) administering the Sale Process and (b) taking all necessary steps and seeking necessary creditor and court approvals for the implementation of the Restructuring. The Restructuring is to be undertaken by way of a proposal to creditors under the BIA and an arrangement under the Business Corporations Act (Ontario) (the "Proposal"). If the Proposal is implemented there will be changes to Colossus' share capital and shareholdings without a shareholder vote, and all claims of creditors of the Company (other than the 2% net smelter return royalty to be issued to Sandstorm) will be converted to equity. If the BIA Proposal is implemented and the initial maximum amount of the DIP Credit Facility (defined below) is converted into equity securities, former holders of Notes will hold approximately 51.5% of the Company's outstanding common shares, Sandstorm will hold approximately 38.8% of the Company's outstanding common shares, lenders under the bridge loan will hold approximately 8.0% of the Company's outstanding common shares and existing shareholders of the Company will hold approximately 1.7% of the Company's outstanding common shares.