Draka offers cash sweetener to induce conversion of 4% convertibles

By Angela McDaniels

Tacoma, Wash., Dec. 8 - Draka Holding NV said it will give €300 in cash per bond to holders who convert their 4% convertible subordinated bonds due 2010 by 11 a.m. ET on Dec. 15.

Holders who convert will receive 67.98 ordinary shares per €1,000 principal amount of bonds, which equals a conversion price of €14.71. Draka shares closed at €6.59 (Amsterdam: DRAK) on Friday.

Holders of €61.8 million of the €100 million convertibles have committed to accept the offer, according to a company news release.

Draka said the offer will optimize its capital structure and financial flexibility by reducing its debt.

Depending on the amount of bondholders accepting the offer, Draka's reported debt will be reduced by €43.3 million to €69.9 million.

The cash payment will be met with existing committed financial resources.

Goldman Sachs International is the broker for the transaction.

Draka is based in Amsterdam and makes cables and cable systems through its operating companies.

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