pre-open?, page-12

Tommytwo

The issue here is that the current convertible bonds (March 2013 maturity) have a conversion price of $6.59 US per share. They will now be replaced with bonds which have a significantly lower conversion price - I guesstimate the conversion price will be set between 2.10-2.25 US per share.

So the lasting effect of this is that you have significantly increased the chance of substantial dilution in the future - assuming the U price lifts and PDN SP responds accordingly. PDN has around 835m ordinary shares in the capital structure, so assuming my conversion price target is right and they raise 225m(the lower amount they are after) then there will be the chance of an addition 110m? shares that could be issue between now at 2017 at around 2.10-2.25 US per share. This will have a lasting effect IMO.


The other aspect is the rate. 2013 bonds have a listed rate at 5%. A lower rate on these bonds will benefit PDN in terms of lower interest costs, a higher rate vice versa.

This was always going to occur and will upon completion settle an issue that I believe has caused pressure on the PDN SP. Hopefully the build goes well.