Ezion Holdings

[weijian]

Cheaper funding with delayed principal payment... sounds familiar
______

Series 003 to Series 007 bond holders have two options. Option A is to defer their principal for seven years, and collect a small 0.25 per cent coupon per annum and 5 per cent redemption premium at the end of seven years. Option B shortens the wait to six years, and instead of a redemption premium, bond holders can swap their holdings for equity. If a bond holder opts to convert his entire principal into shares, he would take a 36 per cent haircut based on an initial conversion price of 30.8 cents. Ezion shares last traded at 19.7 cents.

For Series 008 perpetuities holders, Option C is similar to Option A except they have to wait 10 years instead of seven. Or they can choose Option D, where they continue to hold a perp but can also swap their holdings for equity.

Shareholders face dilution of up to 47.5 per cent from this proposal. Ezion's DBS-backed bonds are not part of the restructuring.

http://www.straitstimes.com/business/ezi...nd-holders

Somehow i feel option B is the "bogeyman", its presence is just to make option A look better. Option C does not appeal to the loss aversion part of investors and especially with the white knight investor thrown in (which has a high risk of dilution to their shareholdings, while giving more hope to survival)