I have previously worked for an ASX listed company that used a similar finance option and there is no question as to the intention of the financier, they are definitely not long on the stock hence the con-note structure. These guys provide an option for companies struggling to raise other forms of finance and get a generous discount to the market for the service. When they convert to equity the intention is to take it off the table quickly, anything above 20% they are happy... on top of this, they would have generated a lot more fees along the way pushing the actual returns much higher. Not a bad gig if you can get it!
These type of arrangements usually scare off any future serious equity investors as it creates a persistent cap to the share price. If EN1 starts performing and they want out of the arrangement it will cost them serious $$$.
EN1 Price at posting:
3.1¢ Sentiment: None Disclosure: Held
