RE:i will vote no tooHermannHaller wrote:
The strike price is too high to add any value. So basically there is nothing being offered to compensate me for the extension. And the fundamentals in Alberta have deteriorated over the past few years, so why would I want to hold for the same interest rate?
If the company could raise money at the same rate, they would have issued a new series of converts. Since they can't, the market is telling them a higher interest rate is required.
I'm just guessing but I don't think it has anything to do with them being able to raise money at the same rate, but rather, this is the least costly option for them. IF they got the extension they wouldn't have to do much other than redeem the part they were doing for cash, which is the same cost either now or later.
However, if they had to issue new debs (at any interest rate/terms) then it costs them ~3.5% of the value to pay all those brokeages who participate in the new issue plus other fees. So they have ~45M outstanding and if they were to issue new ones it would cost them ~1.6 Million dollars more than the current option.
I still voted no. They aren't going to have any time for a plan b but they really should have one in place,
Here is an article from 4 days ago about this being a bad deal (for us).
https://divestor.com/?p=7706