Shares of Dye & Durham experienced a 6.77% drop on Friday to C$11.02, contributing to a 33% fall year-to-date. The decline followed the company's announcement of its plan to refinance convertible debt and bolster its financial position.
CEO Matthew Proud confirmed that the Q1 performance was on track and revealed a debt reduction plan by C$95 million (C$69 million). The firm intends to cancel up to C$95 million of its 3.75% debentures due in 2026. This repayment will be offset with C$32.3 million in cash and retiring the debt at a rate of C$750 per C$1,000 principal.
To cover cash payable and overallotments, Dye & Durham plans to issue new debentures worth C$20.4 million. Canaccord Genuity has been entitled to purchase up to C$5 million of these new debentures, which offer a 6.50% interest and are convertible at C$40 a share.
This move is part of the company's broader strategy to strengthen its financial position amidst challenging market conditions. Despite the initial market reaction, the company remains confident in its financial outlook and strategy execution.
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