marcomarcoz, my understanding is this: example: 1. Say con holder coverts 10,000,000 notes to Shares at 1.89 cents (30% discount to 10 day VWAP) = $189,000
2. ESI's debt reduces by $189,000
3. Con Note holder then sells at market at the higher SP (2.7 cents) adding to selling pressure. Nice work if you can get it. It does not really matter to the con note holder what level the share price is (30% profit is 30% right?)
It should be pointed out that the extra 10% discount was given as incentive to speed up the process of reducing debt thereby reducing the EROSION OF CASH (declared in the Half Year financials) that would occur in paying the 10% (?) interest rate on the $2m debt (from Nov 2009 to Nov 2011). I'm guessing the 10% interest, anyone know?.
Short term pain for holders in my opinion BUT LONG TERM - REDUCED DEBT and REDUCED CASH EROSION. Maybe there were better ways to achieve the same result, i would not know but it's done now (and only a 10 weeks to go till 17th May)
Feel free to correct me. tbedon
ESI Price at posting:
2.4¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)