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Gold/Mining/Energy : Harken Energy Corporation (HEC) -- Ignore unavailable to you. Want to Upgrade?

To: Lawton Hutchison who wrote (3098)	7/4/1998 9:03:00 AM
From: Zeev Hed	Read Replies (1) \| Respond to of 5504

Lawton, almost any debenture has an early call provision and even some preferred. Yes, HEC has the option to call these floorless if the conversion rate were to decline below $4.8/share (or close to it), at least for one of the floorless. The question is what do they need the cash for, calling the floorless (then why issue these in the first place) or for operation and exploration. The point I have been trying to make is that the fact that HEC had to accept a "floorless" provision in these instruments should be considered a red flag. Typically such provisions are accepted only when the company is financially with its back to the wall. Zeev