debt repayment plansIn both the conference call and the AGM, they said that May 31, 2017 is a "key date" because that's when they can redeem the senior notes at par. They also talked about eliminating all debt by the end of 2018, which can only mean that they expect the debenture holders to convert them to common shares.
So, a May 2017 refinancing is no longer just conventional wisdom at Stockhouse. It's now acknowledged as something that's probably going to happen.
This year, their gross debt decreased but their net debt actually increased, mostly due to $90 million of acquisitions that they paid for with cash. They seem to want to do more small acquisitions.
Given this, I have trouble seeing how they can pay off $400 million of debt in the next 2 1/2 years. If they pay off $100 million in each of 2016, 2017, and 2018, that still leaves $100 million of debt.
In the conference call, they used the intriguing phrase "optimize the capital structure". This suggests that they are open to possibilities beyond common shares and debt.
Are they thinking about issuing preferred shares? This would be a way to keep $100 or $200 million of what is essentially debt while technically being debt free.
Those of us who can remember preferred shares trading for pennies on the dollar might balk at the thought of ever buying a preferred share at par from these guys, but it is a different company and a different leadership so why not?