If i am reading the news release correctly:

They are raising 175 Million in equity through a rights offering at 1.25 $/Share  (i.e issuing 140 Million Shares being issued). Also raising 350 Million in Debt - Use Both to Pay off the 525 Million in Debt currently on the Balance Sheet

Current Company Value:  525 in Debt, 235 Million in Equity (100 Million Shares at $2.35 each) = $760 Million in Enteprise Value

New Value once they restructure the Capital: If we know the company is worth 760 Million with 350 Million in Debt, leaves 410 Million Equity.  410 / 240 Million Shares = $1.71 $/share  (note - value of the equity should go up some as they will have less debt and lower financing costs - Perhaps 5 to 10% so $1.80 range?) 

When they announced this the shares were trading at 2.60 or so.  Each Share I assume allows you to purchase 1.4 shares with the rights offering (100 Million currently, 140 Million new shares, 240 Million shares total)  So if you owned shares at 2.60 and bought rights for 1.25 your average cost will become

2.60 + 1.4(1.25) = 4.35 :   4.35 / 2.4 = $1.81  (2.4 is 1 share you own and 1.4 you are buying)

I did not see a 1.4 ratio anywhere - assumed it from the information at hand.

 

If you paid 1.50 for ex for 1000 shares, at 2.60 you were up $1100 prior to the announcement

If you owned 1000 shares at 2.60 you will then own 2400 shares at 1.85 assuming you buy the rights. If you paid 1.50 for the 1000 and 1.25 for the 1400 = $3250 versus the percieved market value of $4320 ($1.80/share from above) you are still up $1070.   i.e no difference if the price reverts to that 1.80 range.  Anything above 1.80 once the restucturing goes through is additional profit.