Debenture holders of Perpetual Energy hope a hearing prior to the Alberta Securities Commission Tuesday will end up like a present day form of the Grinch Who Stole Christmas.
The debenture holders are appealing a decision through the ASC’s executive director approving a rights offering through the Calgary-based energy company, which defines itself as having “a spectrum of resource-style opportunities spanning heavy oil, natural gas liquids and bitumen along with a large base of shallow gas assets.”
The debenture holders, who’re owed $34.9 million, don’t like the relation to that rights offering because they feel it transfers too much of Perpetual’s equity ownership to the current shareholders. Additionally they believe that their rights, considering that they’re higher the meals chain than common shareholders, aren’t being protected.
Specifically they disagree with Perpetual’s decision to allow rights simply to existing shareholders C and not to the new common shareholders who’ll receive shares when the debentures are converted to equity at year end. Quite simply, they need a normal Christmas, getting their pile of goodies like everyone else.
Without the rights offering, the debenture holders might have controlled the company. The main reason: Perpetual’s share price has fallen so drastically and they’ll be issued millions of shares at low prices. However when the rights offering is put into this mixture, the present common shareholders get control and that control increases because the share price declines.