China Nickel Resources Holdings yesterday made a proposal to the holders of its outstanding zero-coupon convertible bond that matures in December 2012 to swap it for a new issue with the same maturity, but more favourable terms. The purpose of the swap is to avoid having to redeem the existing CB this coming December when a put option is due and consequently the company is also proposing to remove the put option on the existing bonds through a consent solicitation.
The existing CB is trading deeply out of the money, having come to market with a 40% premium back in 2007 when the share price was almost three times as high as it is now....
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