Saj Karsan
Long only, deep value, contrarian

IBI Group Management Tries To Put One Over On Debt Holders

IBI Group's (OTCPK:OTCPK:IBIBF) 2014 debentures are due on December 31st of this year. But rather than pay them off, the company is asking debt holders for a five-year extension. To ratify the extension, the company needs 2/3's of debt holders to agree to the company's offer.

One might think that in order to secure such an extension, the company might offer superior terms (e.g. a higher interest rate); but no, the other terms offered by the company remain exactly the same.

So what is the company offering these debt holders? A proposal right out of the prisoner's dilemma handbook: a "consent fee" payment of 7 cents per dollar of par only for those who vote "yes"....

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