Funcom gets votes to withhold coupon payout on convertibles until 2018

By Susanna Moon

Chicago, Sept. 19 – Funcom NV said it obtained holder approval to allow interest to accrue until maturity on its 10% senior convertible bond issue 2011/2014.

The bondholder meeting was held Monday in the Netherlands, according to a notice.

As announced Sept. 2, Funcom was asking holders to approve more amendments to the convertibles on the heels of a recent coupon reduction and maturity extension until 2018, as announced July 10.

This time, the issuer was seeking to avoid quarterly interest payments in cash.

Bondholders could then choose to receive accrued interest in cash or in the form of shares.

The conversion would be “effected by a set-off of the total amount of accrued, but unpaid, interest to be converted against the issuing of the whole number of shares resulting from dividing the total amount of accrued, but unpaid, interest by the conversion price,” the release noted, with any fractional shares paid in cash.

For questions e-mail investor@funcom.com.

Recent changes

The company said on July 20 that holders had delivered the needed votes to amend the convertibles again, that time to reduce the coupon and to extend the maturity to Dec. 31, 2018 from Dec. 15, 2016.

The coupon was slashed in half to 5% for the period from April 25, 2013 to July 20, 2016 and to 3.5% after that. Also, interest would be paid in-kind from April 25, 2013 until Feb. 26, 2016, each with a denomination of $1.00.

The conversion price also was lowered to $0.1036 per share from $0.24 per share resulting in a conversion rate of 9.6525 shares.

The bond denomination was reduced to $1.00 from $100,000.

The proposed changes were intended to provide a “more reasonable conversion price incentive given current share [prices],” according to a previous notice.

The company’s stock (OTCBB: FCMKF) last closed at $0.07 on May 28.

Funcom’s major creditor, KGJ Investments SA, Sicav-SIF, which holds $6 million of the bonds, had offered to extend the maturity date until Dec. 31, 2018 and to cut the coupon to 3.5%.

As announced Oct. 26, 2015, Funcom received unanimous approval from bondholders to amend the convertibles and to push out the maturity to Dec. 15, 2016.

The company also cut the conversion price to $0.24 per share from $0.37 per share.

Funcom is a video game developer based in Oslo.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.