Seventh Continent Announces Results of Put Option on Company
OREANDA-NEWS. On 02 July 2009 The Seventh Continent (hereafter referred to as "the Company") announced the deadline has expired for the Company's offer to exchange its Series 02 bonds (registration number 4-02-00462-H, dated 26/12/2006, total par value RUB 7.0 bln) for the new bond issue, Series CP-01 (hereafter referred to as "the Commercial Paper"). The offer made by the Company to its bondholders was to exchange the Series 02 bonds for the new Commercial Paper issue, with 20% of the par value on redemption of the Series 02 bonds simultaneously.
The terms and conditions of the new Commercial Paper include:
• The total nominal value is RUB 5,800,000,000;
• The maturity is two years;
• The coupon will be paid quarterly;
• The annual coupon interest rate is 15.5%.
The conditions of the Commercial Paper issue provide principal debt amortization of 20% of par value during the 364th, 455th, 546th, 637th and 728th days from the date of placement. The Commercial Paper's yield to maturity is 17%.
Commercial Paper issue was placed on MICEX on 19 June 2009 (registration number 4B01-01-00462-H) and has a total par value RUB 5.8 bln.
MDM Bank acts as organizer, underwriter and the payment agent on the Commercial Paper issue.
As of the deadline for accepting the offer, bondholders accounting for 27.2% of the total issue of Series 02 bonds did not agree to the terms offered by the Company.
Under the circumstances, the Company has decided to extend the deadline for exchanging the Series 02 bonds for the new Commercial Paper issue until 7 July 2009. Upon the expiration of the new deadline, the Company expects to negotiate terms with all bondholders of Series 02 bonds.
Given the need to maintain sufficient cash flow to support normal operations, the Company will not be able to fulfill its obligations to those bondholders that do not accept its offering to exchange the Series 02 bonds for the new Commercial Paper issue.
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