I wrote an article about Tecnoglass that was published on Seeking Alpha and it should now be accessible for everybody to view after a 24 hour embargo. I think the Tecnoglass warrants are currently a compelling opportunity because the company is in the process of launching an exchange offer that allows warrant holders to exchange 2.5 warrants for 1 share. The stock is currently trading at $11.71 while the warrants can be bought for $3.95 which means that you can effectively buy the stock at $9.88/share, a discount of 16%. It’s not quite as simple as that since the warrant exchange has been delayed multiple times already. But since the warrants have a strike of $8.00 they have an intrinsic value of $3.71, so the downside is limited and you get exposure to a rapidly growing company that is cheaply valued compared to its peers. But I’m not going to recap the whole article, if you want to know a bit more I suggest you read it.
Author is long Tecnoglass warrants
Sounds quite interesting, thank you for sharing. Will be looking into this one.
Thanks for sharing. So how does the exchange work? Wait for them to officially confirm the warrant exchange and we choose to tender our warrants in exchange for shares? How does foreign investors tender the warrants? Thanks.
Yes, you will have to wait till they launch the tender offer. After that you should be able to instruct your broker to tender your shares, but that will depend on your broker how that exactly works (some you can do it online, some you might need to call etc).
why would they be delaying the fixed exchange?
I’m not sure I understand your question?
Why are there not doing the tender off now? You say the warrants have a fixed exchange and they want to call them in…So what are they waiting for?
They need to file the 10K first before they can finalize the S4 filing that is required to start the exchange offer.
Thanks for replying to my comment Alpha.
Do you have a recommendation (book? or otherwise?) on where one can more about legal and governance type of stuff involved in tenders and other corporate affairs. I’m very much a value investor so my numbers and bottom up research I’m fine with, but like the activist type of work that sometimes crosses paths these days, but I don’t know how to build up on this stuff….Any suggestions?
I’m not sure if there is a good source for that. The more deals you follow, the more you learn. That’s what I did, and what I’m still doing.