well well some action today.. bought up to 15 cents and well bid at 12.5... the magical lets or lets not exercise our options. Although quite a bit of time to go. Certainly more support now than the last 6 months or so.
well well some action today.. bought up to 15 cents and well bid at 12.5... the magical lets or lets not exercise our options. Although quite a bit of time to go. Certainly more support now than the last 6 months or so.
Sorry, revised post...
... seems a bit insulting to be offering to buy back the DPC010's at 55cpu off the former debenture holders who received them at face value $1 in August.
From what I can see, they may be illiquid, but the on market trades have been closer to last trade at approx 73.5cpu. Given (I think) the DPC010 will now represent about 12% of original debenture holding, they are basically offering the former debenture holders another 6 cents in the $ haircut.
If they couldn't offer 90%+ of face value, then better they did nothing than to add insult to injury.
To be fair though, the announcement makes it clear that they are targeting people who may not necessarily want to hold the notes and are happy to walk away with the loss. Nobody has an obligation to take up the offer and, as they state, "we have an obligation to use funds in the best interests of all Dorchester shareholders".
I agree with Felix here, I have a 200 odd holding. Now I cant really go and sell that on market can I and I may not want to wait for 3 years. In essence very smart of DPC to be doing this...If they can get 5 million, they are effectively adding about 4 million to the bottom line..... very clever.
But Lizard, some debenture holders may feel it is adding insult to injury... they dont have to take up the offer though. I will be interested to see how many take it up.
Announced yesterday, 1.8million of the Notes bought back. Very good for DPC to pick up this much... adds to the bottom line.
I didn't see an interest rate indicated for the notes - did you? Provided they are at reasonable rates, it seems like the sensible thing to do. As far as former debenture holders are concerned, I don't see this as too much of an issue given that the shares are to be issued at 10cps and option conversion adjusted to match. Not ideal, but at least enables DPC to continue on their planned growth path and easy to see why the banks don't want to help with funding facility.
Pretty significant overhang though, so it's going to keep the shares from being terribly interesting for a while.
Just having a close look at DPC - I'm thinking it would be crazy to buy the heads at current prices if you weren't prepared to buy the notes...DPC010.
A rise of 25% in the shares gives you 10cps and brings into play conversion of the notes and the options - and massive dilution, which probably makes it unlikely. However, it also means they would have enough funds to repay the notes in full - though, at the moment, they are repurchasing as many as they think they can afford at 70 cents in the $.
Just noticed that the Convertible notes given to shareholders not only pay better interest (8.95% +) but are first-ranking and therefore ahead of the DPC010 if I am reading aright. Given the chances of them finding $18m in time to repay the noteholders in mid-2013, this may not be the last possible dilution for shareholders. Options converting at 10cps would be a good outcome... but looks unlikely unless they have a March hare in next years hat. Not sure there are any "good" investments in DPC, but the DPC010's would surely have to be preferable to the shares...
I see DPC are trying to buy back the DPC010 at 92cpn and are asking noteholders to approve this on a 75% vote rather than making the offer to all holders. To support this, they have come up with a report suggesting that 92cps is at the top end of the valuation range, and implies a 15% yield. This seems an odd conclusion to me. The notes are due for repayment at $1 each in mid 2013 and pay 5% pa which, although low, is still an improvement on most one year rates at present. Given DPC seem to be able to find the funds to pay at least 92% of the notes back right now, then why should the valuation be pricing in much of a default risk at this point? Sure, I would question where DPC have got the funds to repay, but it does seem like they are once again treating their long-suffering former debenture holders with contempt. I know they can still point to having provided better returns than many other debenture providers, including the likes of the larger Hanover and Strategic, but I'm not sure that being "less bad" is a virtue.
No doubt the report will convince noteholders to vote it through - no surprises that they got the report from some outfit I've never heard of before... it will, however, take many years before my distaste for DPC passes.
Lizard This cat will vote no. I might say yes at $1.00 as this includes this quarters Interest & possibly longer depending on how many meetings they need & date of settlement. I think they will struggle to make the proposed settlement date.
I am also DPC010 holder and at this stage intend to vote against the compulsory purchase @ 92c times number of notes remaining 14.961m = $13.76m. If they can raise $13.76m then surely @ $1.00 the cost would be $14.961m and probably able to raise that also , dif of $1.12m. I guessing they want to book a nice gain of $1.12m in the accounts. By the sounds of things the first meeting will not get the required numbers and hence the second meeting will be the one that determines if they get the green light. If the notes are holding up DPC on a number of fronts and hence the need to repurchase early will allow them to act, then $1 got to be the price.
May I ask how many notes both you people have "Possum the Cat & Lizard"?. I can muster about 270,000 and I'm guessing most small holders won't vote.