Rank: Elder Joined: 6/23/2009 Posts: 13,549 Location: nairobi
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murchr wrote:hisah wrote:Aguytrying wrote:@hisah.
1. What does it mean by unrealized exchange losses? Is it a paper loss or a real loss and when will it be realised?
2. About the strike price, will new shares need to be issued, or have they already been issued? Does it also mean that until the share reaches 53.80 (1$= 103 Kes) that the debt can't be converted? Or can the company be forced to pay the difference to convert the debt into shares?
I'm getting interested as price tanks, hence the many questions. I can't recall all the details, but it may have been structured like that of TCL i.e. payable in 2016. I think the Nigerian firm (bond holder)was to get 13% shareholding and a board seat. Forex losses if I'm not wrong are still paper losses.
Not sure if the new shares are already issued. I think it'll depended on the debt being converted to equity at maturity.
But I'm sure by 2018 ARM will have rebounded from this market smackdown. The magic number is 54 for the conversion. If they for instant borrowed $1M which was kes 85 back then, but they now have to pay $1M+interest when the $ is trading at 105 how is that paper loss? From your example, the immediate payment will be real loss, but annualized payments shall be paper loss since the FX high position can retract
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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