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Funcom seeks to slash coupon of 10% convertibles, extend until 2018
By Susanna Moon
Chicago, July 6 – Funcom NV is asking to again amend its 10% senior convertible bond issue 2011/2014, this time to reduce the coupon rate and to extend the maturity to Dec. 31, 2018 from Dec. 15, 2016.
The company has set a bondholders meeting for July 20 in Oslo.
If the proposed changes are approved, the coupon would be slashed in half to 5% for the period from April 25, 2013 to July 20, 2016 and to 3.5% after that, according to a notice from Nordic Trustee ASA.
What’s more, interest from April 25, 2013 until Feb. 26, 2016 would be paid in-kind, each with a denomination of $1.00.
Also, the conversion price would be lowered to $0.1036 per share from $0.24 per share resulting in a conversion rate of 9.6525 shares.
The bond denomination would be reduced to $1.00 from $100,000.
The proposed changes are intended to provide a “more reasonable conversion price incentive given current share [prices],” the company noted.
The company’s stock (OTCBB: FCMKF) last closed at $0.07 on May 28.
In order to form a quorum, at least 75% of the voting bonds must be represented at the meeting. For the measure to pass, at least half of votes cast must be in favor.
Funcom’s major creditor, KGJ Investments SA, Sicav-SIF, which holds $6 million of the bonds, has offered to extend the maturity date until Dec. 31, 2018 and to slash the coupon to 3.5%.
As announced Oct. 26, 2015, Funcom received unanimous approval from bondholders to amend the convertibles and to push out the maturity to Dec. 15, 2016.
The company also cut the conversion price to $0.24 per share from $0.37 per share.
Funcom is a video game developer based in Oslo.
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