1) If it is a $5bln hedge fund, then $24 million is not really all that material to them in the overall scheme of things (less than half a per cent of the total fund); and 2) As their debt is unsecured, if they don't accept the restructure and instead force TZL into liquidation there is unlikely to be anything left for them after the liquidators and employees have been paid. At least by giving TZ a stay of execution and converting the debt to equity there is a possibility if the current board are successful in turning things around there is a possibility of seeing at least part of their money back.
This $5 bln hedge fund is the same hedge fund that backed the previous management to the tune of $24 mln so I'm certainly not attributing any special abilities, knowledge or insights to them.
Also, the conversion price for QVT is a maximum of $1.00. If a cap raising is done at less than $1 prior to QVT converting their shares then the conversion price will be equal to the cap raising price (it appears that the first $1.25m have already been converted so will not be subject to this clause).
TZL Price at posting:
91.3¢ Sentiment: None Disclosure: Held
