Shareholders of TVX Gold (TVX-T) have approved the company’s proposal to convert US$250 million in gold-linked convertible notes into 321.5 million shares.
Shareholders at the annual meeting approved the conversion by a vote of 81%. Noteholders had previously voted 99% in favour of taking shares against the existing debt.
The note issue, which bore interest at 5% annually, weighed heavily on TVX’s balance sheet.
At the end of March, the company had total assets of US$757 million and total liabilities of US$357 million. The US$237-million equity component of the note issue — the amount that, for accounting purposes, was expected to be converted into shares — effectively brought TVX into deficit.
TVX, which had 35.7 million shares outstanding, would have 357 million shares after the conversion, which is tentatively scheduled for July 10.
The conversion should leave the company with about US$50 million in cash.
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