So if, hypothetically, profit was 50m per annum, and market cap at 27c is $100m, and equity swap occurs at 100m worth of shares at 27c per share to eliminate the debt, effectively earnings at 2x change to 4x. If $200m were to be swapped, earnings would be at 6x.
The profit figures and 27c swap price are arbitrary and mean nothing, but it is an example of a deal being possible which could work well for shareholders who bought at current prices. It all depends on achievable future earnings, deal agreed upon (if any) and the risk of bankruptcy being reduced.
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