My understanding is that those who chose to elect to convert 50% of their holdings to shares in March 09 (for May 09 conversion) will then get the choice to convert the other half of their holdings in the Nov 09 conversion (it could well be automatic rather than a choice, I need to look into that). This could be shares or it could be cash, depending on what the company's situation is. Right now it is looking very likely to be cash. The sweep effectively has this more or less blocked out from cash payments.
Those who did not choose to convert were therefore deemed to have accepted the conversion notice and are therefore rolled over to Nov 2010 as per the original reset notice. Therefore they are still bound by the existing Trust Deed and the process starts over again in 2010. Therefore more people may request to convert 50% in May 2010 and the other 50% in Nov 2010, and so on and so forth until all bondholders eventually convert.
So there will not be a total conversion of everything in Nov 2009. Only those who chose to convert in March will get converted.
NeilN, your comment on the $1.77 old VWAP will indeed stop spasmidic conversions outside of the conversion terms as described above, but in the end it will ultimately not stop people from converting.
The best BBI can hope for is to have money ready in 2010 to stop the balance from converting.
From a company perspective, the less of these on issue does ultimately equal less liabilities for the company, but it is very wealth destructive to ordinary shareholders.
BBI Price at posting:
9.3¢ Sentiment: None Disclosure: Held
