Orco Property Group gets extension of safeguard proceedings, seeks consents to amend bonds

By Angela McDaniels

Tacoma, Wash., Dec. 1 - Orco Property Group SA's protection from creditors under a safeguard procedure has been extended to March 25 by the Paris Commercial Court, according to a company news release.

The procedure, reserved for companies that can demonstrate their solvency, allows a company to continue operations while completing a restructuring plan.

As previously reported, bondholders rejected the company's proposed debt-restructuring plan in September.

The company is preparing a new plan to present to the court and is soliciting consents from bondholders to amend the terms of its €50,272,605 principal amount of 4.5% convertible bonds due 2010, €175,000,462 principal amount of 2.5% bonds due 2014 and the warrants issued with the bonds.

Bondholders will vote on the proposed changes at a meeting on Dec. 16. The deadline for submitting voting instructions is 6 a.m. ET on Dec. 11.

Currently, for every 10 warrants exercised, the holders may request the early redemption of one bond at a price of €686.10, including accrued interest. This amount is only payable by offset against the amount of the subscription corresponding to the exercise of warrants.

The proposed amendments would allow the company to redeem the bonds at par, and the redemption price would be applied to the exercise of the warrants. Only whole shares would be issued, so the difference between the value of the bond and the value of the shares would be paid in cash.

In order to amend the terms of the 2.5% bonds, holders of half of the bonds must vote on the proposal and two-thirds of votes cast must be in favor of the proposal.

The voting certificate needed in order to participate at the meeting is available at www.orcogroup.com or by contacting the bondholders representative at lleroi@pt.lu.

The company also announced that discussions with Colony Capital about bolstering Orco Property's equity have been terminated. Orco Property said that given the lack of debt restructuring to date, the investment conditions have not been met and Colony Capital's option expired.

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

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