GREY:SWYDF - Post by User
Post by
xauxag9on Feb 24, 2018 5:55pm
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Post# 27615518
common shares wrecked by capital structure
common shares wrecked by capital structureWe have avoided buying Stornoway Diamond shares and we are glad to have done so. The debenture issue of a few years ago was punitive to shareholders because the new loans were secured by the juiciest assets. Common shareholders only have a claim on the residual assets after all creditors claims have been met. The terms of the debt also came with hefty interest charges. Whenever you own common shares in a company and new financiers come in and lay big claims to the hard assets, it's usually a negative. If a company has no debt or property liens the common shareholders own everything.