Originally Posted by
biker
Balance, these preference shares were effectively cancelled by the Board. They were only ever going to be of interest if the share price reached 2.2x the IPO price (ie $2.75) after 3 years. when they could be taken up by paying $1.25
Because they were issued shares, they were effectively financed on the books by a non recourse loan. There has been no gain whatsoever to the holders or cost to shareholders.
These shares were also entitled to the rights issue regardless of the current shareprice being well below $1.25. However, the board decided that wasn't really fair so redeemed or effectively cancelled them and they are now a total non issue. I think in this case the board has acted honourably.