Eguana seeks OK to nix mandatory redemption feature of convertibles

By Angela McDaniels

Tacoma, Wash., Feb. 6 - Eguana Technologies Inc. plans to remove the five-year term on each of its series of 8% convertible first preferred shares, according to a company news release.

Shareholders will vote on the proposal at a meeting on Feb. 27. Two-thirds of the votes cast at the meeting are needed in order to approve the proposal.

Currently, the company is obliged to redeem the convertibles within five years of the respective date of issue, and they are characterized as debt under IFRS accounting practices. By removing the mandatory redemption feature, the convertibles will cease to be an obligation of the company, and the company believes that they will be treated as senior equity.

The company said the largest holder of each series of convertibles, other than the series 15 convertibles, is Doughty Hanson Technology Ventures, which has committed to vote in favor of the amendment provided that all series are amended equally as planned.

As of the record date for the meeting, there were a total of 1,067,086 convertibles issued and outstanding in multiple series - 7, 9, 10, 11 ,12 13 14 and 15. They have a liquidation preference of C$10 each. Accrued dividends are added to the amount payable on redemption or liquidation and the number of common shares into which the preferreds are convertible.

Based in in Calgary, Alta., Eguana makes intelligent low-voltage power electronics platforms for distributed smart grid and energy storage applications.

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