The key paragraph"During the three months ended September 30, 2024 and subsequently, the REIT’s financial condition has continued to deteriorate. The REIT now requires additional funding in the near term and amendments to its existing indebtedness in order to continue as a going concern. Accordingly, during the three months ended September 30, 2024, and with the assistance of professional restructuring advisors, the REIT initiated a process to seek a restructuring of a majority of its outstanding indebtedness and to raise additional capital (collectively, the “Recapitalization Plan”). The potential Recapitalization Plan may involve, among other things, amendments to the REIT’s existing secured
indebtedness (including amendments to covenants and extensions of maturities, among other potential amendments), conversion of all or a portion of the REIT’s convertible debentures into equity, additional subscriptions for units, additional interim secured funding and/or a potential rights offering to raise additional equity capital. The REIT is currently in discussions with certain of its lenders and related parties regarding the terms of an acceptable potential Recapitalization Plan. As of the date hereof, no agreement has been reached with any of the REIT’s stakeholders with respect to a potential Recapitalization Plan, and there can be no assurance that the REIT will be successful in
negotiating a potential Recapitalization Plan, or in raising the additional funding needed for the REIT to continue as a going concern. If the REIT is unsuccessful in negotiating a potential Recapitalization Plan and raising additional capital in the near term, the REIT will be unable to continue as a going concern, and, in that case, the market price of the units and the convertible debentures would be materially adversely affected or extinguished."
So the outcome for the commons and debenture holders depends on what kind of restructuring deal they come up with. My guess is that GA will put in money and end up with a majority of the common shares. Maybe current shareholders will also get the opportunity to subscribe and maintain their current proportional ownership.
"Conversion of all or a portion of the REIT’s convertible debentures into equity" is on the table, but not the most likely in my opinion, as it would not generate any new cash. Why would GA go to all this trouble only to have the debenture holders end up with most of the shares? I suspect the key issue under negotiation is, how much new cash is required for the senior lenders to sign off on the deal.