Awful deal21 Dec 2015 22:01
Who is advising the CEO ? , probably not the Nomad or broker as he is a strong character . The usual premium to the previous share price ( 19.5p ) for a CUL with a 7.5% coupon is 30% , and that is unsecured . So with a strike price of 15p on these convertibles the marker makers drop the price on the off . Therefore on paper the CEO made a few hundred thousand pounds profits on his convertibles but lost £1.3m on his 24.8 m shares at the end of day close . Ie if the broker says 15p is fair strike price then that is the new price ! Am I wrong or can anybody explain why the broker didn't advise the convertibles should be at 27p rather than 15p.