Turners (TNR) bonds

[Beagle]

'The SPP issue and placement' waters down the chance to buy shares at a 'super discounted' price, should the TRA share price at the conversion date be more than $3.95 (triggering the $3.75 conversion price ceiling). But it doesn't water down the chance of the bonds being 'in the money'. Because the offer to purchase shares using the bond money at bond maturity still stands. And those shares will still be issued at a 5% discount to the prevailing share price, whatever that price may be. The lower the prevailing share price at bond maturity time, the more shares the bondholder gets. Granted most of that 5% discount would evaporate if the bondholder wanted to sell their newly acquired shares in a hurry. But why would they want to do that, when the option exists for a full cash repayment of the bond at face value?

There is one more benefit for bondholders that deserves a mention. That is the opportunity to get in on the ground floor for a helping of new TRAHC bonds should Turners see fit to issue such a thing. I am betting TRAHC bonds will be a reality.

SNOOPY

You need a super discount if you can call it that for any new shares on bond conversion to be in the money if recent market evidence is reliable. Shares were $3.40 or thereabouts for quite a while and are now $3.20 or thereabouts which is a 6% SP decrease through the current capital raise and we're not done yet. There's also the chance more shareholders will sell in the next few days to fund their SPP entitlement and more selling after the SPP shares are issued as some shareholders look to work the arbitrage between the current SP and $3.02.

I agree 100% that the likelihood of a new issue of TRAHC is extremely high and as you quite rightly point out the current bonds confer preference on a future issue of same, (for whatever that's worth) which in light of the history that Blackcap has kindly reminded me of, it would appear to be very little.

Get bitten once through lack of deep research is one thing but to expose yourself to being treated inequitably a second time, that's one's own fault. Any way you slice and dice this bondholders are being treated inequitably. The premium to par the bonds have been trading at has vanished and that is clear market evidence that bondholders prospects for a capital gain on conversion has sharply diminished. I will take the 6.5% return and while I won't absolutely commit to a course of action at this stage, at this point I am strongly inclined towards investing elsewhere next September. 9% EPS growth this year, (even if achieved) doesn't overwhelm me with enthusiasm.

Correct, and DPC survived because they did front up. I just know that at the time it was not all kosher in the eyes of a few what happened. They did not need to do what they did. Some of the directors that were there then are still here now. Not saying they are implicit, just stating let the buyer beware. I know back then too the actions did wonders for the share price, it was bond holders who felt disadvantaged. As a shareholder myself I was not concerned. However my friend who had sold his shares (options) to buy the "less risky" bonds (to keep the same $ investment in DPC) felt he lost a lot of money and we are talking in the $100,000's here. So he was mightily ropable.

Thanks mate, appreciate your background reminder on their darker historical days. Makes another motor vehicle company's 99 year solid history look even more compelling by comparison doesn't it !