Orco fails to get consents needed to amend convertibles, 2.5% bonds

By Angela McDaniels

Tacoma, Wash., Jan. 13 - Orco Property Group SA's plan to amend the terms of its €50,272,605 principal amount of 4.5% convertible bonds due 2010 and €175,000,462 principal amount of 2.5% bonds due March 28, 2014 was rejected by bondholders at meetings held on Jan. 13, according to a company news release.

Currently, for every 10 warrants exercised, the holders may request the early redemption of one 2.5% bond at a price of €1,463.90 and one 4.5% convertible at €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 have allowed the company to redeem the bonds at par, with the redemption price applied to the exercise of the warrants and the difference between the value of the bond and the value of the shares paid in cash.

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

As previously reported, the company has protection from creditors under a safeguard procedure through March 25. The procedure, reserved for companies that can demonstrate their solvency, allows a company to continue operations while completing a restructuring plan.

Bondholders rejected the company's proposed debt-restructuring plan in September. The company is preparing a new restructuring plan to present to the Paris Commercial Court.

Warrant holders meeting

The bonds were issued with attached warrants. At a reconvened meeting on Jan. 20, holders of the warrants will vote on modifications to the warrant's terms, which include:

• Until Feb. 15, the current soft call price is €87.00 for a first tranche of 2012 warrants, €130.50 for a second tranche and €174.00 for a third and final tranche so as to allow Orco to redeem the warrants until Feb. 15 provided that the closing price of the company's shares exceeds the applicable price; and

• From Feb. 16 onwards, the soft call price will be €10.30 for the first tranche of 2012 warrants, €15.45 for a second tranche and €20.60 for a third and last tranche in order to allow Orco to redeem the warrants until Nov. 18, 2012, provided that the closing price of the company's shares exceeds the applicable price.

The earlier meeting of warrant holders was adjourned because the required quorum - 50% of the holders - was not present.

The payment agent is the Bank of New York Mellon (44 20 7964 8889).

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.