From PPVN on ADVFN24 Apr 2018 17:42
"Hello, so now that the share issuance business is behind us it�s hopefully clear that these bonds, once converted, will not affect our shareprice or our market volume. What is affecting our shareprice is the background selling that is going on and will continue to do so until all (well, 85% or so) remaining shares represented by our CBs have been sold. As I�ve previously noted, the large trades that appear post close are, in the main, the amount that our CB holders have sold during the day. So what does this mean?
- Our CB holders elected to convert 331 bonds at Sirius� invitation, represented by the 215mm shares issued (net of incentive, premium to parity shares etc). This number of shares or thereabouts will disappear from our outstanding short positions in the coming days. The reason why they still remain today is that shares have not yet been returned to lenders, short filings have not yet been made, etc. The positions in Short Tracker also seem to update retrospectively, so for example should a change occur in the positions today on the website, it would have been notified to the FCA on around 18th April (for example). I expect the 300mm number to have dropped to around 100mm by the middle of next week.
- We have 1,221 bonds remaining o/s at this time, which for all intents and purposes represents 793.9mm shares remaining to be sold by our CB holders. Of that 793.9mm shares, approximately 100mm will remain short (so the net �for sale� amount of shares is currently around 694mm).
- We are in a trading range because of this selling pressure above the call option Sirius have on the bonds ($0.538), and because of the outstanding short positions which will be buying back heavily in the market should the shareprice drop below the strike ($0.3076). So conveniently, we are pretty much exactly in the middle of this range and have been since February. Anything near or below the strike is therefore a screaming buy, anywhere above would be a sell (if you�re looking to trade). Anything inbetween is really guesswork, or company progress on the mine, or sentiment, or whatever.
So what could break us out of this range? Well, selling all remaining shares. I say �all� remaining shares with the following caveat � Sirius have a call option on the bonds should 85% be converted. This does not mean that they will purchase them back at par. It means they will give notice to bondholders that they are going to call the bonds, and that CB holders have until xxx date to convert them to shares, which the CB holders will � and they will continue to sell the shares they get at their leisure going forward. We would need Sirius to have received conversion requests for 1,700 bonds by that stage. So by my calculations, we have 793.9mm shares remaining to be sold, less the 100mm shares that will remain as outstanding shorts (the �hedge�, for the CB holders bond), less the 19
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