BPZ Resources Inc (OTCMKTS:BPZR) added 15% to its market value on Wednesday’s trading session. The gains came after sharp decline of more than 64% on Tuesday’s trading session. The shares plunged after the company’s stocks were delisted from the NYSE. The reason being BPZ is no longer suitable for listing on the NYSE, as its share price ‘abnormally low.’
The disappointing events
Investors were not delighted with delisting of BPZ from the NYSE exchange. It is a prestigious exchange and delisting certainly creates a negative image of the company. BPZ Resources Inc (OTCMKTS:BPZR) filed 8-K which also stated that the delisting also included a lot of information on company’s convertible dent. The report noted that BPZ will avail a grace period of ten days in respect to its outstanding 6.5% ‘Notes’ that were due on March 1.
NPZ is getting some slack isn’t main concern at this point of time. Investors have to consider the fact that the total outstanding amount is almost $62 million. Once ten days grace period is over, the holders of minimum 25% in total principal amount or the trustee can then announced them as immediately due and payable.
As per the report, if BPZ don’t pays 2015 Notes, a cross default would be noted, allowing the trusting and holders of at least 25% in total principal amount of 2017 Notes to announced the entire amount of interest and principal, that is immediately due and payable. The 2017 and 2015 Notes have a combined outstanding principal of $229 million.
The future ahead
In event of BPZ Resources Inc (OTCMKTS:BPZR) failure to pay debts within the given time, the market would get flooded with $229 million worth of shares. Even if that doesn’t occur immediately, the threat that it can happen at any time in coming days, is tarrying enough to consider a disastrous crash.