Hi KBLGA holders.Note holders and Hybrid holders commonly face...

Hi KBLGA holders.
Note holders and Hybrid holders commonly face this situation, which not infrequently can cause bad blood between Shareholders and holders of the above instruments.

On the face of it, it sounds simple enough. But I would urge the KBLGA holders to consult a lawyer with a strong knowledge of Trust Deeds. The consequences at times can turn out vastly different than originally envisaged. That is what I will be doing. The "What If's" in these situations are endless.

Following are the guts of the proposed changes.

"The purpose of Resolution 4 is to approve amendments to the Note Conditions to:
(a) now reset the Conversion Ratio to 3 (being 3 shares for 1 Note); and
(b) amend the Conversion Ratio adjustment provisions so that shares issued under any future share purchase plan
including shares placed as a shortfall to such a plan will trigger a further adjustment to the reset Conversion Ratio.
The Directors believe that it is in the interests of shareholders to encourage Noteholders to convert their Notes to shares":

"Although conversions will dilute shareholders, shareholders will benefit from the Company retaining the 38 cents which would otherwise be required to be paid by the Company on the Maturity Date for each Note and, to the extent that conversions may occur before the Maturity Date, shareholders will retain the benefit of cash which would otherwise be required to be paid on half yearly interest payments. If all Noteholders converted their Notes to shares on the basis of the current Conversion Ratio and the Company’s current issued shares, the Company would be obliged to issue 28,954,516 shares which would represent 6.8% the total increased number of shares on issue. On the basis of the proposed Conversion Ratio of 3 and the
Company’s current issued shares, the Company would be required to issue 86,863,548 shares which would represent 18% of the total increased number of shares on issue.
The Directors believe the changes to be approved by the Resolution will benefit Noteholders by providing them with the option of a conversion price which is more likely to be attractive, without affecting their right to receive repayment of 38 cents per note on the Maturity Date, being 16 August 2016.

Resetting the Conversion Ratio to 3 will mean that a share price above 12.7 cents per share will make conversion to shares attractive. The Directors believe that a share price at or above these levels before the Maturity Date is not unrealistic given the Company’s current prospects."

Looking at the current share price getting it to 12.7 cents
might be a tall order. Never the less it says: "That is not unrealistic given the Company's current prospects.

Well, do we take from that statement that things are going fine at KBL. If so why the hell have the Board not already told us shareholders with some form of Operational Announcement. Come on Jim. We want to hear your good news too before we have to start putting in our votes before the AGM.