Bio-Trick have outstanding convertible bonds of about 909.5 million renminbi and these bond holders have exercised their bond’s put option since January 2008.
Bio-Trick has to sort out the refinancing of its convertible bonds as soon as possible. The share price has slide from over one dollar mark to as low as 15 cents today.
It is interesting to observe how creative financial engineering can rescue once the market darling in the good times.
Share placement/ Right Issue/Warrant Issue
- Highly dilutive in today’s share price. How many share they have to issue to raise that amount? If Bio-Trick still trading at $1 mark, all problems shall have been resolved long ago with this method.
Setup public-listed business trust
- The management claimed that there are ‘some enquires from pension funds in Europe and the US’ who are looking for long-term and consistent returns. These sound fantastic but why Bio-Trick? Why not Hyflux with similar business trust, proven track record, strong parent backing, large capitalization and idol CEO ?
White Knight
- Not heard of after the death of the white knight from Hong Kong. Lehman Brothers also looking for one now.
Bridging loan
- Will you loan to a stranger deeply in debt? While, no way, not even you are running a charitable fund. Even if the loan deal is on, Bio-Trick is expected to service the interest for many years to come.
Asset Sale
- Strip the asset for fire sale one by one.
In my guess, the combination of asset sale with bridging loan is the most likely outcome. Of course, we will see the gloom face of many shareholders.
This article is not means to advise or encourage you to buy/sell or to do whatsoever. Caveat emptor!
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