BMB Munai, Inc. Announces Note Restructure
OREANDA-NEWS. March 9, 2011. BMB Munai, Inc. (NYSE Amex: KAZ) announced that it has restructured its outstanding USD 60 million aggregate principal amount of 9.0% Convertible Senior Notes due 2012 (the "Notes"). In connection with the restructure (the "Note Restructure"), the Company entered into, among other agreements, Supplemental Indenture No. 6, dated March 4, 2011, between the Company and The Bank of New York Mellon, as trustee ("Supplemental Indenture No. 6"), including an Amended and Restated Indenture, dated as of March 4, 2011 , between the Company and the trustee (the "Restated Indenture").
Pursuant to the Note Restructure, the Company, among other things, (i) increased the coupon rate of the Notes from 9.0% to 10.75%, (ii) made a USD 1.0 million cash payment to holders of the Notes, (iii) increased the aggregate principal amount of the Notes from USD 60.0 million to USD 61.4 million, (iv) extended the maturity date from July 13, 2012 to July 13, 2013, (v) granted the holders of the Notes a new put option, exercisable one year prior to the new maturity date, (vi) agreed to additional covenant restrictions, including a prohibition on paying dividends on shares of the Company's common stock and on the pledge or disposal of assets, (vii) agreed to semi-annual principal amortization payments of 30% of the Company's excess cash flow, (viii) agreed to allow the holders of the Notes to appoint a member to the board of the directors of the Company and the board of directors or similar body of Emir Oil LLP, the Company's wholly-owned subsidiary, and (ix) entered into a new Investors Rights Agreements, dated as of March 4, 2011, with the holders of the Notes and other parties (the "Rights Agreement").
In connection with the Note Restructure, the holders of the Notes approved the sale of Emir Oil LLP ("Emir Oil"), the Company's wholly-owned operating subsidiary, to Palaeontol B. V. (the "Buyer"), a subsidiary of MIE Holdings Corporation ("MIE"), pursuant to the Participation Interest Purchase Agreement dated February 14, 2011 among the Company, the Buyer and MIE. If the sale of Emir Oil is consummated, the Company will be required to redeem the Notes out of the sale proceeds.
Subject to approval of the Company's common stockholders, the Note Restructure will also include a reduction of the conversion price of the Notes from USD 7.2094 per share to USD 2.00 per share with a corresponding reduction in the minimum conversion price from a floor of USD 6.95 per share to USD 1.00 per share (the "Conversion Price Reduction"). The Conversion Price Reduction may also be subject to regulatory approval of the Kazakhstan Ministry of Oil and Gas.
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