CANEXUS CORP 6.5 PCT DEBS T.CUS.DB.D

Conv Debt Balance Sheet Calculation Finalized

[6milli]

Thank you to Blue and to Pierre for making me scrutinize Note 9 yet again.

I failed to notice several line items within Note 9.

The line items are:

$20.8 million Embedded Conversion Options of Series IV, V and VI Convertible Debentures
$60.0 million Series III Convertible Debentures, FVTPL
$227.0 million Series IV, V and VI Convertible Debentures

If you add the $227 million + the $60 million = $287 million which is the amount stated on the balance sheet.

As Note 9 says, the embedded value of options is not included in the balance sheet amount.

[Calgaryrider]

Are we all convinced yet that a Debenture (an obligation) has the same impact as Debt with respect to a company's shareholders? Either you owe $287M in money or you owe it in shares....same impact on the shareholder. Now, $2.12; Precisely what the value of Canexus should be if you assume NATO is zero cash flow (which it is) and including the pile of debt this company

[6milli]

Just to be clear the principal value of the convertible debt is $313 million

[Stockvesting]

Calgaryrider,   Great info.  NATO appears to be the only downfall, but a BIG downfall.  If the debt levels are around 625-650 million assets will be sold to reduce debt levels.    Asset sale, dividend cut, poor 2014 results, no nato sale will push the value of this stock down. The way I see it, wait until potentially Q2/Q3 to buy in at $1-$1.50

[BlueCollar51]

The debate re the Converts was if they were considered “Debt” in the calculations for the Credit Facility Covenants which they are NOT!   If you have a look at Note 10 on the Q3 report you will see that NATO is classified as an “Asset under construction”. Its value is transferred gradually to the balance sheet as “Plant and equipment” as it is completed.   During the Whistler

[Stockvesting]

You guys can take it for what its worth, rumors are: 1) Divdend either gone or below 3cents 2) NATO has no sale due to offers at 75M - 100M 3) Earning were below expectations, write offs included for q4 4) Debt levels higher than anticipated 5) Cuts to operation/business  

[Ubervak]

Take it for what it's worth that you're also a fabricated user created yesterday, March 11th lol. Kherson again?? This/these clowns sure work hard to part you from your shares. - Uber

[Stockvesting]

Not Kherson v2.  I'm a real person :)  Anyways, after the 1cent divvy is announced I'm getting in or after one of their sites are sold (Q2).

[Stockvesting]

Was I wrong?

[Jackroy]

And I say ...... good. NATO - write it down while you can and the market expects you to. That is what any new CEO would do. Dividend, cut it (hopefully not to 3 cents but you never know) to stabilize the company... you are not getting any investor value for it anyway. That is what any new CEO would do. Cuts to operating business..... why not, that is what any new CEO would do. So, as an investor

[Stockvesting]

Hi Jackroy, I agree.  2015 seems to be a reset year and then grow for 2016.

[Jackroy]

Well Stockvesting ..... good job ... you were darn close. The only one you were off on was the debt levels. I will qualify number 3 as well - just NATO Really. I would never sell at this price and lose... there is nothing to put your money in and at least the company is responsibly paying down debt. That said, my Debentures are the best deal in the market. 25% under par for 3 years. I get 8+% on

[6milli]

Blue: I certainly was not debating you about anything regarding the debt covenants. The converts are clearly not considered in this calculation. Where did you see any argument regarding debt convenants??????????????

[BlueCollar51]

Blue: I certainly was not debating you about anything regarding the debt covenants. The converts are clearly not considered in this calculation. Where did you see any argument regarding debt convenants?????????????? It wasn't you it was Calgaryrider that made that claim if I remenber correctly. I find that your posts are intellegent / rational and worth reading.

[Calgaryrider]

Blue, good post.  Just to clarify, it wasn't me doubting how the convenants are set or how they figure into debt.  Debs are debt, but they are entirely subsidized by the shareholders.  To say there is no liability is incorrect.  There is....to shareholders.  My point was merely that this entire discussion is only relevant to the solvency of the company

[BlueCollar51]

Calgaryrider; I have to apoligize. I checked my fact which I should have done before posting and it was HAWK37 that started the ball rolling.

[Kherson]

Posted March 12, 2015...