The bondholders are no doubt one of the three groups that RYO is dealing with. It depends on their sense of risk. Being bondholders they have a strong hand(first lien on Kemiss), but venture vultures might present a better offer, in the way of deferred shares like reg S or D, or some kind of warrants?? Those shares sell at a discount of 20-40% of market and cannot be sold for a lengthy period, typically two years, but need not be paid as they are equity, whereas a bond person wants coupons clipped and with Gold down and Kemiss a lean start coupon payments are to be avoided, especially high rate coupons, for the risk. The standard vulture will also want cash flow soon and might also have a gun to her head to the effect that if a timeline is missed we sell "this", and then that and after a while there is little left.
Do not forget that gold may not turn tomorrow and if they have extra bonds to pay or vulutures to feed it it will be a long oneraous task to draw back from the brink.
I think most SH would rather sell some shares, deferred and at a discount. Right now we are so low that if I am angry at that idea and think the Reg S/D/warrabt people are getting a steat, well I can buy my own shares at these prices RYO could go way up if gold does well.
Bill |
