I think we are getting close to calling that the tipping point is somewhere in the 12cpa - 16cpa dividend level. Above these levels the noteholders are over-rewarded.
As to capital reconstruction in the Noteholder Circular, there is a firm to be appointed to be the "Calculating Agent" who will undertake the analysis in the case of dividends, buybacks share placements, splits, consolidations, options, rights issues, non-share offers, change of control, etc. Each has a few pages in the document with complex calculations attached. I have not analysed these, but I think that the lawyers will have ensured that the returns/rights to the noteholders would not be reduced in these circumstances.
So although any corporate action (eg buyback) is NOT restricted, it will affect the conversion price.
NHC Price at posting:
$1.87 Sentiment: None Disclosure: Held
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