Perpetual Energy Decision May Deter Issuers from Pursuing Dilutive Rights Offerings in Tandem with Convertible Debenture Share Repayments

The Alberta Securities Commission (ASC) recently released its reasons in an application between Perpetual Energy Inc. (“Perpetual”) and a group of Perpetual’s convertible debentureholders (the “Applicants”).  The decision highlights the challenges presented by convertible debentures as they approach maturity for issuers experiencing a declining share price.