SHS Viveon to issue up to €4 million four-year 7.5% convertibles via subscription rights

By Angela McDaniels

Tacoma, Wash., Feb. 24 - SHS Viveon AG plans to issue up to €4 million of 7.5% convertible bonds due March 12, 2013 through subscription rights granted to its shareholders, according to a company news release.

The company will issue up to 40,000 convertibles with a nominal value of €100 each.

The conversion price is €8 per share, which equals a conversion ratio of 12.5.

The conversion ratio will not be affected by the company's plan to reduce its share capital at the ratio of 40 to 1. If the share capital reduction has not been registered in the public registry by Dec. 31, convertible holders have the right to terminate their bonds.

The terms of the convertibles give SHS Viveon a mandatory conversion right, and the company said the plan calls for the convertibles to be promptly converted into equity capital.

Subscription

Shareholders will be invited to subscribe for one convertible for every 375 shares held.

The subscription period is from Feb. 27 to March 13, and subscription rights will not be tradable.

If any convertibles are left over after the subscription period ends, then VEM Aktienbank AG will offer those convertibles to third parties via a private placement at their subscription price.

If less than 25,000 convertibles are subscribed for, then the issue will be cancelled.

The convertibles are one component of the company's recapitalization, which began at the end of 2008. The first step was gaining shareholder approval of the planned share capital reduction, which was passed by shareholders at an extraordinary general meeting on Feb. 10.

The company said the second step is securing fresh capital via the convertibles issue in order to reduce the increased risk of accounting insolvency due to the low equity capital.

The proceeds from the convertibles will be used to stabilize the "tense financial situation" of the company, as SHS Viveon put it, and to repay part of the convertible bonds issued in 2006.

SHS Viveon is a business and internet technology consulting company based in Martinsried, Germany.

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