.Don't forget loan comes with a 3% PA simple interest rate, so by June 30 ( 1 month from now ), that adds 4.95 cents to the cost per share meaning holders will need to pay 59.95 cents per share, or a ~58% premium to the current share price when they pay out their loans.
Not sure as to why they would want to maintain a situation where the exercise price increases by 1.65 cents per year, especially when they can buy shares on market at ~a 37% discount to the option / debt repayment price. They might not be in a financial position buy buy all their " entitlements" in 1 go now, but the way things stand, it may be years before the SP hit's 60 cents, by which time the cost price will have risen even further.Under current conditions, exercising the loan would benefit BRK as it effectively be a cap raise at a large premium to market.
So right now, this " incentive" is a disincentive to the directors from a financial point of view. They would be better off forfeiting the loan, forfeiting the shares and if they want shares, start buying on market.This would be a win / win as BRK would have a cashless buy back of ~3% of the SOI, and the directors wouldn't have to pay overs for their shares.
Can't really speak to individual motivations for keeping going with the current circumstances, but after 3 years since the loans were first activated, it's time for this situation to be resolved, for everyone's benefit.
BRK Price at posting:
37.5¢ Sentiment: Buy Disclosure: Held
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