Time to force conversion of the convertible debentureThe convertible debentures convert at a rate of 134.5682 shares per US$1,000. There are $575 million shares outstanding. The total number of shares that need to be issued to convert the debentures are $575 M/1000 * 134.5682 = 77,376,715 shares. Forcing converstion will likely result in a cash penalty but it would rid the company of the debenutres and force the shorts to cover. Wouldn't that be nice. The only way the debentures don't convert is if the share price drops below Cad$9.31. Unlikely.
Time to get rid of the convert. BTW this was very expensive financing. Effectively we will have issued shares work $931.4 million (77.376M *16.25 closing price divided by 1.35US conversion rate) to settle a liability of $575 M. The annual effective cost of the financing if we converted the shares today without factoring in the coupon of 2.5% is about 17% based on the debenutres being outstanding for three years. Great deal for convertible debenture holders.