Macro Tsimmis

intelligently hedged investment

Transmeridian (TMY) update #20

Posted by intelledgement on Tue, 20 May 08

Transmeridian (TMY) may be moving closer to providing an attractive opportunity to new investors who could fund a desperately needed increase in production. Yesterday, the company announced the appointment of four new directors to the board, all of whom were nominated “by holders of the Company’s 20% Junior Redeemable Convertible Preferred Stock pursuant to the exercise of the holders’ rights with respect to Board matters provided for in the certificate of designations for the junior preferred stock.”

With a fiduciary responsibility to all shareholders, those directors will be obligated to consider forgiving or delaying dividend payments if such a maneuver is key to obtaining fresh funding…and they are persuaded that said fresh funding is likely to benefit the company tactically (by enabling management to boost production and attain operational profitability) and strategically (by making the South Alibek field more attractive to potential buyers of the company).

Of course, now that they are on the board, another possibility is that they might conclude things are hopeless and throwing good money after bad is a dumb idea.

Stay tuned.

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