Can someone explain conversion terms of the debentures? I am confused because the original press release says that these debentures are convertible on 12/31/2015, but in the very same paragraph they say that can be redeemed *at par plus accrued interest" on 12/31/2015 as long as the stock trades at 125% of conversion price.
This language makes it sound like it is impossible for the holder of these debentures to realize any upside on them if the price of the stock goes above CAD $1.625 ($1.30 * 125%) for any sustained period. If for example the stock was trading at $2.50, wouldn't Sprott force a conversion at par value of $100/debenture on 12/31/2015, thus preventing the holder from realizing any upside from conversion?
In other words, the language here seems to suggest that Sprott can act to block the debenture holder before the debenture holder can take action to convert. Original press release language is here:
"The Debentures will not be redeemable before December 31, 2015. Subject to automatic extension, on or afterDecember 31, 2015 and prior to December 31, 2016, Sprott Power may, at its option, redeem the Debentures at par plus accrued and unpaid interest, provided that the weighted average trading price for the Sprott Power Shares on the Toronto Stock Exchange (the "TSX") for the 20 consecutive trading days ending five trading days prior to the applicable date (the "Current Market Price") is not less than 125% of the Conversion Price. From December 31, 2016, the Debentures will be redeemable at Sprott Power's option at any time at par plus accrued and unpaid interest."