Convertible Notes Info

Time to reflect on the real facts with what is likely going on and why ASX ASIC & probably ‘the Trustee for the Convertible Note holders’ must have a real dilemma.
11/9/2015 Half Yearly Report & Accounts show:-

• Cash at bank and on hand $6.998 million.
• Total shares on issue as at 30/06/2015 240,475,760
• Convertible Notes on issue as at 30/06/2015 23,750,000 with a face/redeemable value of $2.00 per note, or a conversion rate of 1:3 (each note is convertible into three fully paid ordinary shares). Next reset date is 31^st October 2015. This is the IMPORTANT STUFF. Potentially the company has to find $47,500,000 on 31^st October 2015 if all noteholders decide to redeem them for the $2.00 per note. Early Redemption on Reset (must be done at least 10 Business Days prior to next Reset Date)

Notes To The Financial Statements For The 30^th June 2015:-
Should the convertible noteholders elect to redeem their notes the Group does not currently have sufficient cash reserves to fund the redemption and continue as a going concern. (suggests there is no longer a financing facility with Maquarie Bank)
Notwithstanding the above the Directors consider it appropriate to prepare the financial statements on a going concern basis after having regard to the following pertinent matter.
It is the opinion of the directors that either:
1) the notes will, once again, be rolled over and therefore the cash required to redeem the notes will not be required, or
2) the announced sale of Northern Star and Big Star assets (refer note 10) will provide the cash required to redeem the notes via either the closure of one of these sales prior to 31 October 2015 or, alternatively, the Group being able to secure short term financing to repay the notes in advance of one of the announced asset sales settling. (again suggests there is no longer a financing facility with Maquarie Bank)
Now: Should the Noteholders have faith that there is cash unconditional offers, with deposits paid and decide to convert their shares on the 1:3 basis, total shares on issue would rise to 308,750,000, so the sale proceeds of approximate US$250 mill (not taking into account any allowances for tax) would need to be assigned to the higher number of shares, which would equate to approximately 80 cents per share. (Excluding any deduction for tax due on sale of properties)
Decision Time For Noteholders:-
The notes rank alongside unsecured creditors but ahead of ordinary shares. So the choice the noteholders have is 1) they have faith the sale of the two properties completes, or 2) they attempt to redeem the Notes on 31^st October 2015 (along with the quarterly interest payment due), which would put the company in a position of default & that it no longer could trade as a going concern and the Trustee for the noteholders, would take action as per Convertible Notes Issue Prospectus dated 22/09/2003
Ranking
If Amity (previous name of Antares Energy) is wound up, Noteholders will rank behind secured creditors of Amity and equally with ordinary creditors of Amity (such as other Noteholders) and ahead of Ordinary Shareholders  in a winding up for a return of capital and any interest payable but unpaid.
If there is a shortfall of funds on winding up, there is a risk that Noteholders will not receive a full (or any) repayment of their money invested in the Convertible Notes or payment of interest payable but unpaid.
Events of Default
Events of default are set out in Schedule 2 of the Note Trust Deed. They include: a default by Amity in payment of any principal which it is bound to pay; a default by Amity in payment of any interest which it is bound to pay and such default continues for a period of 30 days; a failure to allot shares following conversion of the Convertible Notes; and defined acts of insolvency or winding up. There are no financial ratio covenants. Upon the occurrence of an event of default which is subsisting and has not either been remedied by Amity or waived by the Trustee  the Trustee has the power (and may seek direction by ordinary resolution from the Noteholders) to declare all moneys owing to the Trustee and the Noteholders due and payable and Amity shall immediately pay such amounts.
Prior to initiating any enforcement action in relation to an event of default by Amity
such as commencing legal proceedings against Amity or entering into any compromise or settlement of a dispute or enforcement action against Amity for any event of default or other breach of the Note Trust Deed, the Trustee must call a meeting of Noteholders and be directed by an ordinary resolution. However, the Trustee need not call a meeting of Noteholders nor take such action unless it reasonably believes the cost of doing so will be met by Amity

Early Redemption on Reset (must be done at least 10 Business Days prior to next Reset Date)
(a) A Noteholder may in its absolute discretion require the Issuer to redeem all or some of its holding of Notes on a Reset Date if the Noteholder gives a notice (Redemption Notice) to the Issuer in the form set out in Schedule 5 on or before the day that is 10 Business Days prior to the next Reset Date.
(b) On the Reset Date the Issuer must redeem the Notes the subject of a Redemption Notice and pay to the Noteholder an amount equal to the Early Redemption Amount in respect of each Note redeemed pursuant to this Condition 4-3
Company Survival Depends On:-

• The Sales agreements get settled or and,
• The noteholders convert their Notes to ordinary shares or and,
• The noteholders roll over their Notes and the company continues to pay an interest rate (at their discretion) of 10% p.a. (This equates to approximately $1.2 mill per quarter, giving the company about 12 months survival after overheads, without raising further funds or selling assets.)

The companies survival is questionable:-
If a reasonable percentage of noteholders choose to redeem the notes and the sale of the 2 properties does not proceed, or the company cannot raise additional funds, or sell other assets.