RE:RE:RE:RE:RE:RE:RE:Company main value is it's Casc reserves and they shouldConvertible notes work best when share price is stable or even better has been in uptrend. When shares are brutally depressed, the terms can be pretty dilutive. Almost as bad as a straight equity raise. And they still have to make quarterly payments on the convertible note, like any other debt.
The advantage they offer to a company is lower interest rates on the amount borrowed. TXP is in a situation where they the interest rate they pay on straight bank debt incurred in Trinidad is deductible against high tax payments on their Trinidad revenues from current production. The interest they would pay on convertible bonds probably would not be deductible. And borrowers would not take huge discount in interest rate because of lack of stability of company. So cost of borrowing might not be greatly reduced, if reduced at all. Which is the main point of a convertible. Pricing of convertible notes gets pretty complex and notes are often converted to equity at the next subsequent offering of equity. I think if the current TXP situation was analyzed carefully straight debt would be better for current shareholders and probably better for company too, if they can get favorable terms from Republic similar to terms on the current bank debt.
To finance with equity at current share price would be punishing to current shareholders. They would probably have to raise at US 20 cents (about 16 pence). That would be 115 million new shares which would dilute current shareholders hugely. I don't see that a convertible note would be better.