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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange)
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To: Russel W. Kennel who wrote (217)7/17/1997 8:01:00 AM
From: Harry_Behemoth   of 2841
 
Here's my layman's view of convertible debentures--may be totally off-base, so beware!

Debentures are just another means to raise capital. They may provide a better bang for the buck than a secondary offering (particularly when mgmt feels their stock is very undervalued.)

If the debentures are converted, the company no longer has the debt on the books (and no interest payment to make) -- seems to me like a wash.

Nothing wrong with increasing the float if the return on the investment is substantial.

Just one Rookie's opinion.
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