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Let's cast our minds back 18 months and why $1.84 was a foregone...

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Goodfella58

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22/02/22

13:46

Post #: 59732868
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Originally posted by tutor: ↑

Actually, I know the SGX-listed $400m CB has been talked about, but don't forget there's this interesting 100m convertible note issued to CVI in Sep 2020... This was an interesting one that sort of became irrelevant as the share price rallied north of the ceiling price ($5.53 at the time).

This CN is supposed to pay $750k every 6 months from 1 September 2020 till same 2025. But here's the thing - CVI can decide if it wants to convert $10m + unpaid interest of the CN into shares at each 6 month interval. The $10m blocks are sort of cumulative... so that means if they haven't converted any yet they can convert all of the previous unconverted blocks.

So far we've had Mar 21, Sep 21 and now coming up to Mar 22. This means CVI could, in theory, convert $30m + any unpaid interest so far (up to $2.25, into Z1P stock, at a price of minimum $1.8443. I think the price is supposed to be "the prevailing market price" less 7%, so right now that might be somewhere in the low $2).

There's still plenty of time till the $100m of CN matures, but the best share price for CVI is $1.8443 (they get the most shares that way). Shareholders will most prefer the max price $5.5328.

The other sneaky one is the warrant for 19m shares. The exercise price is the lower of $5.1639 and the price of any equity securities issued in the exercise period (expires Sep 2023). So basically, if there's an equity raising soon, then the warrant holders can tip some of their money in and get some shares as well at the same price as everyone else. If that was $2, then the company would raise an extra $38m if the holder exercises the warrants. You don't get nothing for nothing though... Z1P issued those warrants for zero price, so repricing at a (hypothetical) placement price is the same as replacing a far OTM call option with an ATM call option for free. I can see why the warrant holder would be barracking for a raising.

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Let's cast our minds back 18 months and why $1.84 was a foregone conclusion

https://hotcopper.com.au/threads/reiterating-10-nov-2020.5649006/page-124?post_id=47748254

Z1P Price at posting: $2.15 Sentiment: Sell Disclosure: Not Held
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Last $1.78		Change -0.035(1.93%)		Mkt cap ! $2.246B

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Let's cast our minds back 18 months and why $1.84 was a foregone...

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Let's cast our minds back 18 months and why $1.84 was a foregone...

Top Stories

Nine's staff strike as Paris Olympic coverage begins

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Monadelphous inks $200M contract with Woodside to help build Pluto LNG – but will it make Scarborough cheaper?

MinRes jumps 5% as the company meets production guidance – depressed iron ore prices be damned

Tissue Repairs soars nearly 32% on TGA approval for wound healing gel

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