Parallel Energy Trust T.PLT.DB

RE:RE:RE:Debs

[alkhor]

Here is something from the debentures prospectus.

Subject to required regulatory approval and provided that there is not a current Event of Default (as defined herein), the Trust may, at its option, elect to satisfy its obligation to pay all or a portion of the principal amount of the Debentures on redemption or at maturity together with accrued and unpaid interest thereon through, in whole or in part, the issuance of freely tradable Units on not more than 60 days and not less than 40 days notice, by delivering that number of Units obtained by dividing the principal amount of the Debentures, together with accrued and unpaid interest thereon, by 95% of the Current Market Price. Further particulars concerning the interest, repurchase and maturity provision of the Debentures are set out under “Details of the Debentures”.

What this means is the interest on the debentures can be paid in new trust units, which at 2 cents a unit (unit price will fall if this option is announced) then there will be an additional 97.5 million shares issued making the debenture holders owning 2/3 of the company at the end of December. Assuming the company continues as a going concern, this could happen again every 6 months until June 2017. At that time the principle amount of the debentures can also be paid in new units, which is meaningless by that time as the debenture holders will already own 99.9% of the company so they will just end up with 100%.