THE OFFER TO EXCHANGE AND THE WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JULY 31, 2008
That is... an hour after the close today.
We'll find out tonight or tomorrow morning what IS happening with the tender offer, instead of having nothing better than the people on the boards guessing what might be happening ???
Even the tenders in hand now won't actually be meaningful until 5 pm today, at which point they are what they are and can't be pulled any more ?
And then, there will still be questions :
If all the notes are tendered... BK... but there will be no debt to take any priority in the resolution of the BK if all the notes have been tendered... and the time the notes were bought will then be a thing that matters, when shareholder rights provisions kick in. So, IF all the notes are tendered, there will be dilution in the shares that are issued to older note holders, and dilution of the shares of newer note holders by the implementation of shareholder rights in the anti-takeover provisions. Seems that should leave existing common holders sort of in the middle... depending on how many of the notes were older, and how many were recently purchased ??? It would be useful to find out if there is volume/timing information available on trading in the XJT notes ?
If none of the notes are tendered... Hmmmmmm ? The risk of BK and the risk of any dilution evaporates... and a share is suddenly worth 3 to 5 times more than it is presently ???
If "some" are tendered... it will matter "how many"... and in determining dilution risk, it will still matter when the notes tendered were bought.
I expect the meaning implicit in the alteration of the rights that was just made, is that "someone" was active in buying up notes in the expectation that conversion would allow them to take control of the company. The change in rights would have put that expectation to rest...
It seems to me that one of the most misunderstood aspects in the evolving situation here is the BK risk. IF all the notes are tendered, there will be a risk of insolvency due to the inability of the company to pay the note holders in the specified currency: shares. At the same time, the tender will have eliminated all the debt... so there will not be any priority given to note holders in any BK... while pretty much leaving it up to a judge to decide what the company can and should do about making the payment to complete the tender offering. Of course, the company could also act, quickly, to solve the problem in any way allowed by the law and the indenture... before there is actually any real insolvency. Which is what I expect would happen IF all the notes are tendered.
I still tend to agree with others who say it looks like it will be, for all practical purposes, an "all or none" result... with "none" being far more likely than not. Those who do tender, if it is a less than meaningful number being converted, will likely get settled in the alternate currency... cash.
So, I'm still expecting, no BK, and no dilution... making a share worth 3 to 5 times the current price, with 20% of the shares held short... and, we should know soon.
AI
