And is there no holding period ? Can they sell them straight away ? As we are seeing with SNAK ?
And is there no holding period ? Can they sell them straight away ? As we are seeing with SNAK ?
I cant tell you that off the top of my head that one RTM. They have not been converted as yet anyway. But as for the options that have recently been converted into shares at 12.5 cents there is not holding period whatsoever as far as I know. Definately not for the Joe Public who have converted their options. This fall in share price of the last 2 weeks is no surprise to me at all.
I clearly have chosen the wrong career path. There are a lot easier ways to make money.
Thanks blackcap.
DPC 1 May announcement talks about the early redemption of the convertible notes (don't worry they won't be forcing an early redemption at a discount on those holders as they did with the DPC010 bonds}. DPC010 bond holders were originally debenture holders prior to 2007/08 meltdown. The convertible notes are held by the big boys who are only set to gain from the conversion and they vested interest to dilute non convertible notes holders when they convert them in July to ordinary shares this year. Aren't they great blokes, still going pay themselves interest to 31 July 2015, not just to 31 July 13, but wait they will be kind to other shareholders by discounting the interest for 2 years the notes are no longer-what gentleman.
Extract of announcement
The Company is also proposing an earlier conversion to ordinary shares of the
110 million ($11 million) Optional Convertible Notes, which would otherwise
be due for repayment (or conversion to ordinary shares, at the Noteholders'
option) on 31 March 2015.
"We have proposed an early July 2013 payment of interest to 31 March 2015 at
a discounted rate and a conversion of the Optional Convertible Notes to
ordinary shares following the payment. The Noteholders have indicated
acceptance of this arrangement and we will be calling a meeting of
shareholders to approve the transaction. The $11 million of debt on the
balance sheet would then become equity." said Mr Byrnes.
As a result of these transactions, shareholders' funds of approximately $29
million at 31 March 2013 would increase by $21 million to $50 million
following the exercise of the options and the share placement, and would
further increase to $61 million on conversion of the Optional Convertible
Notes to ordinary shares in July 2013.
Hi Romulus,
Are you suggesting that the convertible debt notes are going to be converted early (ie in 2013), but the holders of the notes are still going to get interest till 2015? I may be reading it wrong but that would seem outrageous. Who are the holders of the convertible notes? Is this information publicly available?
I am trying to make sense of it. So the notes 11 million of them, will be converted to shares at 10 cents per share. At present the notes pay interest to the note holders and would normally run till March 2015 upon which either the company pays them back the $11m or converts to shares. Now they want to convert to shares early at 10 cents and also get interest till 2015. Doesn't seem fair if you ask me. But shareholders can vote on this issue can they not? I don't think I will be in a hurry to buy these shares at 25 cents anytime soon. After conversion there will be 468 million on offer. Plenty more room for the share price to slip I think.
Thanks Biker, like I suspected. The share price seems to be reacting accordingly as well... down to 23 now.
I don't see the notes as a big issue. It is tidying up outstanding debt ( at a fairly high rate of interest) which will become equity, the capital was needed back in 2011 to help get the company to where it is now, and the notes would convert in 2015 anyway. The interest to 2015 will be paid at a discounted rate. ( not sure of the formula)
I think 23c is a buying opportunity with a medium term view. Another 12-18 months will make a big difference to this company IMHO, but DYOR
Thats where I differ from your view Biker. I do see the notes as a big issue. The debt could be paid back in cash but now the debt is being issued at 10 cents a share further diluting existing shareholders. I know its up to the discretion of the debt holders and not the company as to how they convert.
For me there are just too many shares outstanding to be buying at present. A lot of the profit that they will announce this year will not be from operations but "profit on repurchase of Notes (DPC010's) at a discount to face value".
Granted the company could go places and does have some interesting prospects, just not for me at a market capitalisation of $107 million. (468 million shares at 23 cents) I see this company more fairly priced on a cap of about 60-70m so about 12.8-14.9 cents per share. But that is just my two pence worth.