Why voting YES for the debenture deal It seems that some debenture holders ignore that Craig Hansen holds both debentures and common equity. And the CEO holds more than 1.5 million common shares, so he will not allow his common stock fortune to go to zero just because some short-sighted debenture holders want to get more from ZAR leaving nothing for the common equity holders.
The debenture holders will receive shares either they convert now at 10 cents or at 95% of the stock price in December 2019. Fact. No cash.
Another fact is that ZAR's current price of 5 cents is the result of these reasons:
1) Epic sell-off in WTI,
2) Epic widening in Canada's oil spreads and
3) Relentless tax loss selling because ZAR was an excellent tax loss candidate as it was much higher than 10 cents in the first nine months of 2018.
In December 2019, all these reasons will not exist, so oil prices will be much higher than today. No tax loss selling, OPEC cuts production, Enbridge's Line 3, crude-by-rail shipments, U.S. refineries end maintenance this month and resume operations again, Alberta's Sturgeon refinery begins full capacity operations in December 2018 etc.
So Craig Hansen has tailwinds to make a deal in 2019 (i.e. sell North Dakota asset) and push ZAR's common stock significantly higher than 10 cents.
As a result, the debenture holders will convert in December 2019 at a higher price than 10 cents, so they will receive MUCH LESS shares than now.
This is not rocket science. I'm surprised that a couple of debenture holders can see only one direction and erroneously think that ZAR's stock can go to 1 cent, so they can get almost 100% of ZAR in December 2019 when they convert and receive shares.