TSX:RPR.DB - Post by User
Post by
TVRon Nov 08, 2024 10:09am
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Post# 36303049
Debenture Holders Now the Key to Restructuring
Debenture Holders Now the Key to RestructuringThe 3 series of convertible debentures outstanding amount to a total of $158.7 million of debt, plus an aditional $10.5 million for accrued unpaid interest to end of 2024. With the latest property writedowns it does not appear possible the REIT can now get back onside with the various secured debt covenants while the debentures are still outstanding. Unitholder equity is now only around $46 million so the unitholders now have little say in what happens.
It now appears likely the only way an acceptable restructuring can be accomplished is to eliminate the debentures by offering an acceptable equity conversion. This effectively puts the debenture group in control of any restructuring since it will not happen without the debenture holders approval. I will be surprised if a group of the larger debenture holders is a not already represented at the restructuring table and it would be nice as a debenture holder if this group would go public and let the other debenture holders know they are respresented in the discussions.
We do not know if there is any outside interest in SOT.UN in the form of potential buyers or acquirers like another REIT. In any event it is a low probability any inrested party would offer to pay out the debentures in cash.
It is positive that today's early trading in SOT.UN has not resulted in an enormous drop in market price (still at 58c a minute ago) given the substantial asset writedown announced yesterday.
Now we wait and see what sort of an offer is put on the table.