LSF6 Rio extends tender offers for IKB perpetual notes to Feb. 29

By Angela McDaniels

Tacoma, Wash., Feb. 2 – IKB Deutsche Industriebank AG said it continues to support LSF6 Rio Sarl’s tender offer for Capital Raising GmbH’s €200 million perpetual fixed-rate notes issued in 2002 and Hybrid Raising GmbH’s €200 million perpetual fixed-rate notes issued in 2004, which has been extended to 10 a.m. ET on Feb. 29 from 10 a.m. ET on Feb. 2.

The payment of interest and principal on the notes is conditioned on the receipt of profit participations and repayment under a silent participation in the commercial enterprise of IKB.

As previously reported, LSF6 Rio is offering to buy back the notes at 20% of par. After the offer is completed, it plans to seek noteholder consent to amendments that would result in the notes being terminated and repaid at 12.5% of their nominal value.

The amendments would need the consent of the issuers to become effective. In separate announcements, the issuers said they do not intend to consent to the amendments or to otherwise agree to, or effect the redemption of, the notes at any price below their nominal value.

According to IKB, LSF6 Rio has received declarations of acceptance for a number of notes that will increase its holdings in the hybrid notes and the capital notes to more than two-thirds after the offer is settled.

Meanwhile, IKB said that it supports the offer and that the purchase price represents a premium of about 8% of nominal value on stock exchange prices before the offer was made Jan. 13.

The notes have economically participated in losses of IKB and last received interest payments in July 2007. The repayment value of the notes was reduced to zero as of March 31, 2012 and has remained at that level since.

“Servicing the compensation agreements of a total amount of €1,151.5 million and the value recovery rights of the hybrid investors means that IKB AG will probably not report any, or only minimal, profit for a long time to come, even if results are positive,” IKB said in a news release.

“In addition, to the extent that net income can be reported in future, the reduction of net accumulated losses means that it will not be possible to replenish the notes, pay interest on the notes or distribute a dividend to the shareholders of IKB AG.”

IKB is a bank based in Dusseldorf, Germany.

© 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.