TSX:RPR.DB - Post by User
Comment by
TVRon Nov 14, 2024 7:04pm
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Post# 36313904
RE:In the IVQ re-org
RE:In the IVQ re-org The IVQ restructuring is interesting but a little murky. Looks like the debentures are only a small part of the restructuring. Hard to figure what the original value of the debentures was (looks like it was around US$50m, but the latest accounts show a "fair value adjustment " to the debentures of US$17m and list the current balance sheet value as US$19.7m. Under the "proposal" they would receive $9.9m in new debentures + US$8.37m in shares at US16c (52.3 million shares). However, they show the current share priice on the Invesque website as US8c so the debentures holders are being asked to take shares valued at twice current market price. In effect they are beinfg asked to take 70c on the $ for their debentures and this does not factor in the "fair value adjustment" which was almost as much as the current accounting value of the debentures. Something odd going on there and I suspect the real deal for these guys is they are probably only being offered something like 25% on the original debenture purchase price. Will it get approved? Voting date is Nov 26.
The IVQ debenture holders are minor players in this restructuring with Magnetar Funds having already agreed to exchange their preferred convertible shares for 716.9 million new common shares at 16c. Based on the Q3 accounts the 9.1 million preferred shares were originally convertible into only 13.7 million common shares. So Magnetar is taking 50 times the number of common shares its preferreds were originally convertible into. I suspect the are getting a much better deal than is being offered to the debenture hoilders.
Only 56.2 million common shares outstanding currently so existing equity hoilders would be diluted to only 6.2% of the 825 million shares that will exist if the restructuring is approved. The debenture offer is 6.3% of the new common shares + their new debentures.
If I was a debenture holder I would not be approving this IVQ deal.