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Athabasca Oil Corp T.ATH

Alternate Symbol(s):  ATHOF

Athabasca Oil Corporation (AOC) is a Canadian energy company with a focused strategy on the development of thermal and light oil assets. AOC’s segments include Light Oil and Thermal Oil. The Thermal Oil segment includes the Company’s assets, liabilities and operating results for the exploration, development and production of bitumen from sand and carbonate rock formations located in the Athabasca region of Northern Alberta. It also consists of two operating oil sands steam assisted gravity drainage projects and a resource base of exploration areas in the Athabasca region of northeastern Alberta. The Light Oil segment includes its assets, liabilities and operating results for the exploration, development and production of light crude oil and medium crude oil, tight oil and conventional natural gas. Its Light Oil segment consists exclusively of the Duvernay in the Greater Kaybob area with about 155,000 gross acres across Kaybob West, Kaybob North, Kaybob East and Two Creeks.


TSX:ATH - Post by User

Comment by Maxmoeon Jan 24, 2022 12:25am
223 Views
Post# 34350927

RE:RE:Bond holders locking in their profits on warrants

RE:RE:Bond holders locking in their profits on warrantsGood question and I would be very surprised if Ath negotiated a use them or lose them short fuse trigger not because they wouldn't think of it, or try it, but no way the bond buyers would settle for that. In a year or two mgmt will have a strong hand to negotiate tougher financing terms. It's only easy to get capital when you don't want it.
BobTheKnob2 wrote:
PUNJABI wrote: Management should not have issued warrants > Big blunder, dilutive and not shareholder-friendly.

"Athabasca Oil Corp. has arranged a private placement offering of 350,000 units. Each unit will consist of $1,000 principal amount of senior secured second lien notes due 2026 which bear interest at 9.75 per cent per annum and one five-year warrant to purchase 227 common shares at an exercise price of 94.41 cents per warrant share (representing the five-day volume-weighted average trading price of the company's common shares on the Toronto Stock Exchange ended Oct. 6):

The average selling price for the new large short position was $1.27 the noteholders shorted the shares and locked in their profit on warrants at an exercise price of 94.41 cents. and will also earn a very fat interest of 9.75%. Noteholders are making a killing and this is thanks to the management. I have seen this in the past too where companies are very desperate or have poor management that allows this kind of situation where they are paying big interest and at this same time allowing risk-free profit-taking on warrants. 

On Friday there was huge volume and the stock tanked there is a chance that the short may have increased. We will find in that in the next report.


 


Question. Doesn't state here, but do the warrants have a callable clause (i.e. if the share price trades for $X and above for 20 consecutive trading days, the warrants become exercisable on 30 days notice - or something to that effect)?


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