Not much discussion about this issue. Here is where the real dilution is looks like on average 34.5 million shares will be issues resulting in an additional 24% dilution before the over allotment. add the 6% from the common issue and we are at 30% dilution +.
Not sure if this company preferred are the way to go or not but it it might be.Never bought a converitble preferred before not sure how they work but you right all this diluation for a bad takeover sad.
Yes, they are diluting the stock. But they said the reason for the dilution is to pay down debt. and not for "general corporate purposes" which would have me worried. The write downs probably caused problems with the lenders requiring this and the drastic dividend cut.
So it is not as bad as it seems. Less interest to be paid and debt reduction in exchange for dilution.
In the CC they said it was to pay for increased capital expenditures at Bloom Lake due to cost overruns. See the article on Yahoo: Cliffs Natural Resources Earnings Call Insights: Bloom Lake and Terms of the Capital Structure.
So it is as bad as it seems. Management is incompetent.