I am a holder of the hybrids (TPAPA) and have also been wondering if the falling TPI share price has been due an expectation of the hybrids converting to ordinary shares in October.
Given the huge dilution this would cause I will be surprised if the company chooses the conversion option.
The hybrids have also been falling and are currently trading around $69 which is a long way from the $100 worth of ordinary share these would convert to.
Another factor to consider is that the hybrids interest must be paid with 100% franking credits attached. If the company does does have the available franking credits then the yield is increased by 30%. I cannot find any reference in the last annual report to the amount of available franking credits.
I suspect the company will do nothing and accept the automatic 2.5% step-up.
They do have an option to re-market the hybrids, but given the pain that the initial holders have experienced I doubt this would be successful.
TPI Price at posting:
83.0¢ Sentiment: Hold Disclosure: Not Held
