InterOil has notified holders of its 8% convertible subordinated debentures, due May, 2013, of its intention to exercise its right to mandatorily convert all outstanding debentures into common shares at a conversion price of $25.00 per share. This conversion right was triggered by the daily volume weighted average price of our common shares remaining at or above the mandatory conversion price of $32.50 for the past 15 consecutive trading days. As of March 31, 2009, the principal amount remaining outstanding of the original $95.0 million worth of the debentures was $79.0 million.
Following the mandatory conversion, none of the 8% debentures will remain outstanding and a total of 3,159,000 common shares will be issued to debenture holders. If the conversion had occurred on March 31, 2009, the Company would have had 39.8 million shares outstanding.
Chief Financial Officer, Collin Visaggio, stated, "This conversion marks another milestone achievement in the transformation of the Company's balance sheet. After the conversion has taken place early in June, the Company's long-term debt to total capitalization ratio is expected to be reduced to 17% on a pro forma basis, down from 34% as at March 31, 2009, and from 68% as of March 31, 2008."
Chief Executive Officer, Phil Mulacek, stated, "This strengthening of our balance sheet better positions InterOil to hasten its development and growth. Our ability to undertake this conversion only a year after the issue of these debentures reflects the considerable milestones we have reached during that short period and the market's recognition of the value we continue to create."
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