GREY:ZARFF - Post by User
Comment by
pablo87on Nov 04, 2018 8:11pm
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Post# 28922335
RE:RE:RE:RE:RE:ZAR's US financing
RE:RE:RE:RE:RE:ZAR's US financingYes this is the most likely scenario IMO. But there are other scenarios of course.
Please understand that these debentures are not "debt" in the traditional sense.
This was a financial vehicle (read many of these indentures, legal language almost identical) created by the big banks to offload the debt owed to them by o&g's. Offload to whom you ask? Well their own clients of course!
In the process, they subordinated the debentures to unsecured creditors and gave the company the option to convert the debt into shares at the end of the term (in case they didn't have the money to pay back investors).
From day 1, debentureholders were always one corporate move away from becoming shareholders at the end of the term, whether they realized it or not.
The other part of the equation of course is the dilutive effect on shareholders, whether THEY realized it or not.
Just a poorly thought out financial instrument that lacks transparency and creates uncertainty.