MEGA Brands gets consents of 10% noteholders to incur more bank debt

By Susanna Moon

Chicago, May 6 - MEGA Brands Inc. said holders approved amending its 10% senior secured debentures to increase borrowings available for working capital purposes under its asset-based credit agreement.

The company said on April 8 that it sought approval to incur additional debt under the agreement and additional revolving facilities up to a total amount equal to 50% of the principal amount of debentures that it purchases from time to time under the indenture, provided that amount not exceed $100 million at any time.

The extraordinary resolution passed by about 92% of the votes on May 6, according to a company press release.

MEGA also previously said it was looking to amend the terms of the notes to:

• Provide the company and its subsidiaries with an ability to dispose of accounts, subject to certain limitations on the amount of accounts disposed of each year, and provide for the release of the security in favor of the holders for the accounts;

• Increase the limit on acquisitions of real property to $5 million from $2 million; and

• Augment the amount of permitted investments to $5 million from $1 million.

The company previously said it was seeking increased flexibility through these amendments.

The company needed approval from holders of at least two-thirds of the notes voted either in person at the meeting or by proxy.

The Montreal-based construction toys, games, puzzles, arts & crafts and stationery company has European headquarters in Temse, Belgium.

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