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Pinetree Capital (PNP.to): Mystery solved

Back in October we at IKN wondered out loud in three separate posts here, and here, and then here (and yeah i liked that last one) just why Sheldon Inwentash and Pinetree Capital (PNP.to) was so, but so keen on dumping just about anything in its portfolio.

Tonight the mystery is solved. Sheldon’s deep in the financial shit.

TORONTO, CANADA–(Marketwired – Nov 10, 2014) – Pinetree Capital Ltd. (PNP.TO) (“Pinetree”)announces that, as at October 31, 2014, it was not in compliance with one of the debt covenants contained in the convertible debenture indenture dated May 17, 2011, as supplemented by the first and second supplemental indenture dated December 11, 2012 and September 12, 2013, respectively, in each case, between the company and Equity Financial Trust Company, as trustee, which govern Pinetree’s 10% convertible unsecured subordinated debentures due May 31, 2016 (“Debentures”) (PNP-DB.TO). The debt covenant at issue prohibits the company’s debt from exceeding 33% of the total value of its assets, as reflected on its (unaudited) consolidated balance sheet as at the last day of each month. As at October 31, 2014, Pinetree’s debt-to-assets ratio was 38.8%.
Pinetree has attempted to manage its debt-to-assets ratio, primarily by retiring in excess of $20 million principal amount of Debentures under normal course issuer bids (representing approximately 27% of the Debentures originally issued), however, the downturn in both commodity prices and the junior resource space generally has eroded the value of the company’s investment portfolio.

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