Here's a real doomsday scenario which should not be...

Here's a real doomsday scenario which should not be dismissed.

There is a $3m QVT loan standby facility. All QVT loans in the past have been in the form of convertible notes.

Can anybody hazard a guess as to what the conversion price on notes will be should TZ need to draw down tomorrow?

a) $2
b) 40c
c) 5c

Failing that, if TZ goes elsewhere and raises an insignificant amount, even $1, would QVT really pass up the triggered opportunity to have about $20m worth of notes repriced down from 35c/42c to a the lowest capital raising price - which could be 8c the way we are heading. Management would 'try' to negotiate but would understandably fail.

Current $20m/0.375c average = 52m extra shares upon conversion
Possible $20m/0.08c average = 250m extra shares upon conversion

TZ is a $1 capital raising away from QVT potentially holding 270m out of 390m shares, or jumping from a converted 37% of the company to a converted 70%. 50c would be the new $10.

I wonder what the trigger could be. A contract for which capital is required? Shareholder would of course have to approve but at a major major cost.

What would you do if you were QVT?