Orco Property amends restructuring plan; bondholders to vote Thursday

By Caroline Salls

Pittsburgh, Sept. 22 - Orco Property Group SA's bondholders will meet Thursday to vote on an improved restructuring plan, according to a company news release.

Orco said the plan includes improved conditions for the restructuring of existing bonds compared to its previous restructuring proposal.

Specifically, the company said the total principal amount of new convertible bonds has been increased to €150 million from €120 million, resulting in an increase in interest to €7.5 million from €6 million.

In addition, the maturity of the new convertible bonds was reduced to Nov. 20, 2016 from Nov. 20, 2017 and the conversion price was lowered to €13 per share from €15 per share.

Orco said the changes will result in a higher number of shares from potential conversion, with the share number increasing to 11.4 million from 8.6 million.

Also under the revised conditions, there will be no early redemption at a discount at the discretion of the issuer.

If the share price reaches 150% of the conversion price, the company said it could call for conversion or reimburse the new convertible bonds at par.

The restructuring proposal also includes a commitment to restrict share dividend at a 3% yield and a commitment to restrict share buybacks to 2% of the total number of shares, on a yearly basis.

Changes to the terms of the 11.4 million of new shares to be issued under the restructuring include a reduction in the lock-up to three months from the issue date from 18 months.

Orco said it will also issue 11.4 million short-term non-transferable warrants, exercisable at a ratio of 1 to 1 into company shares at a price of €7.

Through the improved proposal, the company said it increases the economic value of the package offered to bondholders, ensures positive conditions for a liquid listing and pricing of the new convertible bonds by aligning restrictions on market conditions and gives bondholders the same opportunity to subscribe to the capital increase as the one offered to Colony and existing shareholders.

Orco Property Group is a Central European developer and asset management company based in Luxembourg.

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