RE:RE:Do not assume debenture conversion is a done dealThere's no need for the Exchange to investigate Baylin. They will simply decide if they'll allow the vote--or what conditions to apply, if any. As I said, I will be shocked if the Exchange does not limit the voting to shareholders who are NOT also debentureholders.
There is one reason why (non-debenture-owning) shareholders might rationally approve this special deal for debentureholders and that is if the company were in financial distress. This is a bit like doing a fire sale on your shares, a desperation financing. Better to massively dilute your stock (and lose most of your investment) than go bankrupt (and lose everything).
So, is the company in financial distress? They're certainly not saying they are but this arrangement sure looks like a financial distress sort of thing. If there is no financial distress then--yes--this could only be a brazen move to grab a chunk of the company on the cheap at the expense of shareholders who happen not to own debentures. It would be giving the debentureholders something that they currently are not entitled to. It would be . . . a gift.