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To make this easy consider the interest payable on £100million. At lets say around 8% interest.
That would equate to £8million a year in interest so £2million a quarter just to repay interest.
£100mil spread across 3 years would be £2.77 million a month thats £8.3million a quarter lol plus the interest it’d be £10.3million.
I hope you can see that’s not possible hence, a debt-equity was inevitable
Sham the major shareholders were opposed to it because it would’ve diluted their shareholding. The only difference is now they wont be diluted.
No difference whatsoever and your obsession with them taking us private is odd. Being listed carries many benefits and gives better access to finance generally.
Dilution or not the companies finances will remain the same less debt means higher share price it really is as simple as that....
In the refinance there will be some dilution alongside a haircut of the debt owed. Do you see any lack of confidence from the majors? no.
If they’re willing to convert debt to equity you can be damn sure they know they’ll get their money back in dividends and a higher share price.
I actually don’t understand any of these concerns and here’s why;
The debt turned into equity is an amount no longer outstanding against the company.
So whilst shareholding will be diluted this will be negated by the increase in value per share due to the lower debt of the company.
2) The company can’t be taken private on a debt for equity deal
The company will have a secure future and finances meaning again shares increase in value.
Ultimately think about it the shareholders wouldnt convert the debt into equity if they didnt believe the shares would grow in value simple as. Otherwise they’d of left it to accrue interest
Yes debt for equity will basically remove it from the balance sheet meaning a healthier company and showing faith in us.
Same way as yoyr own credit report the less showing outstanding on it the easier it is in future to raise funds if needed etc/cheaper rates. Helpful for lets say if we wanted to expand