Comment by chrischapman256on Jun 07, 2021 1:22pm

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Post# 33340982
RE:RE:creation of preferred shares proposed
RE:RE:creation of preferred shares proposed
Prefference shares are complicated in that there are so many versions, but in most circumstances they are really just bonds. They are not the same thing as common shares. The common share holders own the company. The preffered shareholders only get what the terms allow them which is generally fixed dividends and liquidation prefference.
Q: Does this dilute the value of teh common's? Because if the preferred have value and the newly issued shares are granted and not purchased, the overall value of the common would be less valued.
A: No, this does not dilute the value of the common shareholders so long as the money raised by selling preffered shares is used to earn more money than than the dividend rate. For a smaller company like Biorem I imagine the dividend rate will be something like 6%.
Q: Can this mean they will be annoucing dividends for the preferred and not to the common? I would be very angry about this after being a shareholder for many years now waiting for that to be a possiblity only to have some new shareholder or insiders pulling the cash out of the company to only those shares that I can't have
A: The preffered shares will have dividends for sure. The company may or may not introduce dividends at that time as well. Probably not right away.
Q: I read the circular and if I vote against it does that mean I have to sell my commons back to the company? I'm confused on the wording of Dissent
A: No you don't have to sell your shares regardless of how you vote. You can sell your shares back to the comany if you write in a letter.
Q: Is there basically no way us shareholders could stop this from going through since they only need 66.7% of the vote for and the major shareholder own 61% of the commons
A: Not sure about that, probably not.