I bet there are going to be some very unhappy GNSPA holders when...

I bet there are going to be some very unhappy GNSPA holders when they get this notice. I have always held and posted here that investors always seem to think that a hybrid is in fact a debt instrument when they want a distribution and ordinary shareholders are not getting any and an equity instrument when the share is running high.

I dont think it makes any difference IMO the equity including hybrids was trashed when they accepted the mill cannot go ahead.

My personal take on things is slightly different to Lordolean's I think that you will find that conversion takes away the auditors question-mark over whether the $120 million is debt or equity and puts it into ordinary equity. That means that the equity side increases by $120 million. It may help with the question of going concern that must be a major issue within the audit.

However I agree that this should have been converted ages ago as it has always been a stumbling block to any valuation in order to refinance.

Without conversion the holders have the right to a value of face value if the company does recapitalise. So $120million thats far too much as it does not recognise the fact that the owners cannot get repayment. On a basis of 421.7 shares for each unit it values the shares given by GNS at 23.7c - well above the market price and in effect if you recapitalise it then is just treated like any other ordinary shareholder. However a GNSPA holder may well believe that as his share (GNSPA) ranked ahead of ordinary shares and the company had up until recently still being paying distributions they were better off than the ordinary shareholders. They may well want to challenge whether the company can convert their equity whilst in suspension or whether GNS is still solvent and as such can continue to trade. Wow the legal firms must be smiling - KM must think the GFC and forestry MIS is father Christmas gift that keeps on giving.

The sad thing is many people - even those on HC ( who I would have thought were more informed than most) have been seeing the fate of GNSPA as somehow different to GNS and more as the fact that they will still receive distributions whilst ordinary shareholders bleed.

This is IMO going to cause a stir in the ranks as many of the GNSPA holders would IMO believe that they would hold GNSPA but would never have bought the ordinary share of GNS.

Reality is sometimes very sobering.