RE:RE:RE:RE:RE:Another picture - $50m 6% Debentures vs $50m common sharesThat's very interesting shareholders. I missed that on first reading of teh ddebenture document that has been filed on Sedar.
It says,
"Subject to any required regulatory approval and provided no event of default has occurred and is continuing, the Company has the option (the “Share Payment Option”) to satisfy its obligation to repay the principal amount of the Debentures, in whole or in part, due upon redemption or at maturity on not more than 60 days’ and not less than 40 days’ prior notice, by delivering that number of freely tradable Shares obtained by dividing the principal amount of the Debentures to be redeemed or which have matured by 95% of the Current Market Price (as defined below) on the date of redemption or maturity, as applicable."
My understanding is that if the stock price is, let's say, $6.00, the debentures can be redeemed for $6.00*0.95 or $5.40 per share = ~185 shares per $1,000. If all debentures were redeemed at this rate, the dilution would be 9.26M shares versus the 13.16M shares at the original $3.80 price quoted in the debenture offering.
Two additional points to note:
- Debenture interest can be satisfied in shares rather than cash, at QTRH's option; and
- Debentures receive dividends should QTRH increase the dividend above the $0.0125 per quarter.