Canexus convertible debenture offering provides Canexus with cash payment option on conversion

Canexus has issued a convertible debenture which provides that Canexus has the option, upon a holder electing to convert, to pay in cash in lieu of delivering shares.  Consistently with some older CRA positions (AC58563 and 91 C.R.-Q.17), the disclosure indicates that the s. 51 non-disposition rule will apply if the holder converts into common shares.  Other recent examples include Chesswood and ENTREC.

Neal Armstrong.  Summary of Canexus preliminary prospectus for convertible debenture offering under Offerings – Convertible Debentures.