Orco convertible holders reject proposal to move up conversion date

By Angela McDaniels

Tacoma, Wash., July 13 - Orco Property Group SA said the resolutions it proposed at a July 13 meeting for the holders of its €109,118,365.20 of convertible bonds did not pass.

About 63% of the convertibles was represented at the meeting, and about 70% of the holders present or represented at the meeting voted in favor of the proposed resolutions. This, however, represented only 44% of the outstanding bonds, and the resolutions required a 50% vote in order to pass.

The terms of the convertibles remain unchanged.

According to a news release, the company wanted to waive the prospectus condition for the new notes to be issued by Orco Germany SA and to advance the second conversion of the convertibles into Orco Germany shares to six business days following the date the Commission de Surveillance du Secteur Financier approves the prospectus relating to the Orco Germany shares. Without the approval, the new shares cannot be publicly traded.

The convertibles were issued on May 9 as part of the restructuring of the group's debt. About 84.5% of Orco Germany's bonds were exchanged for the new convertibles. The company converted €76 million of the convertibles into 18,361,540 Orco Property shares on May 14, and the remainder is scheduled to be converted into 7,848,081 shares on Sept. 28.

Under the company's previously announced plans, the remaining 15.5% of Orco Germany's bonds were to be exchanged for new notes.

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

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