Nattopharma seeks holder OK to amend, extend 10.4% bonds due 2011

By Susanna Moon

Chicago, Feb. 8 - NattoPharma ASA said it is asking holders of its 10.4% senior bonds due 2011 to consider amendments at a meeting on Feb. 17 "to strengthen its equity and secure working capital for continuation of its business."

Nattopharma's proposed refinancing is comprised mainly of a rights issue aimed at existing shareholders for proceeds of about NOK 20.5 million and a loan restructuring for a conversion of 50% of the loan into equity.

Changes also include extending the maturity date of the loan to July 10, 2013 from July 10, 2011.

The company would convert half the loan, or NOK 8.5 million, into new equity in a private placement aimed at bondholders at NOK 0.435 per share.

The conversion is expected to be completed on March 24.

The amount of any interest accrued up to the settlement date on the bonds converted will become due 10 banking days from the settlement date.

The completion of the amendment and the conversion is conditioned on the rights issue raising proceeds of at least NOK 20 million.

Proceeds from the rights issue will cover overdue payments and repayment of short-term bridge loans, and will bolster the company's financial condition.

The company said it is in financial distress and had in the third quarter interest-bearing debt of NOK 16.2 million, which will become due by the end of the first half.

"The borrower is soon out of cash or cash equivalents and is thus working to obtain additional short-term financing, which is a pre-requisite for the continued operations until the rights issue is completed," the release noted.

"The borrower will go into bankruptcy if the refinancing is not successfully completed. However, if the refinancing is successful, the borrower expects strong growth in the future, which (among other factors) is due to the market still being in an early start-up phase, increased demand from the major manufacturers in the dietary supplement industry as well as an increased focus on functional food and on global diseases such as osteoporosis and cardio vascular diseases," the company added.

The rights issue was approved at a shareholder meeting on Jan. 20.

Nattopharma said it has received written approval of the proposal from bondholders representing more than two-thirds of the outstanding bonds.

Norsk Tillitsmann ASA is the loan trustee.

Fondsfinans ASA (Nils Erling Odegaard at +47 23 11 30 30 or e-mail neo@fondsfinans.no, or Johan Aaserud at +47 23 11 30 28 or e-mail ja@fondsfinans.no) is the financial adviser.

Nattopharma is a Lysaker, Norway-based biotechnology company that sells and develops products containing natural vitamin K2.

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