EMTA says holders of 6% convertibles allege default; company denies claim

By Laura Lutz

Des Moines, Sept. 17 - EMTA Holdings, Inc. said in an 8-K filing with the Securities and Exchange Commission that holders of its 6% convertible secured notes have asserted that the company is in default under the notes.

EMTA has denied the alleged default, and the noteholders have filed a breach-of-contract suit, the filing said.

The noteholders are AJW Offshore, Ltd.; AJW Qualified Partners, LLC; AJW Partners, LLC; and New Millennium Capital Partners II, LLC.

EMTA informed the investors that it was suspending its agreements with them on Aug. 23, according to the 8-K.

The company said in the filing that it "believes that the investors had violated the terms and conditions of the loan agreement."

On Sept. 11, the investors issued a default notice alleging that EMTA had failed to honor its conversion obligations under the notes.

On Sept. 14, the investors filed a complaint in the Supreme Court of the State of New York, County of New York, alleging that EMTA has breached its contracts by not honoring notices of conversion for the notes.

EMTA plans to "vigorously" defend these actions and believes it has good defenses and cause for cross complaints, according to the 8-K.

The notes were issued in principal amount of $3.0 million under a securities purchase agreement dated April 28, 2006. As a result of the default notice, the entire outstanding principal amount plus accrued interest, which totals $2.4 million, will be due immediately, the 8-K said.

EMTA is an energy conservation company based in Scottsdale, Ariz.

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