Infogrames restructuring plan includes capital increase, short-term loan extension, Oceane exchange offer

By Caroline Salls

Pittsburgh, Sept. 12 - Infogrames Entertainment released its final debt restructuring plan Tuesday that includes a €74 million capital increase, a €25 million short-term loan and an Oceane exchange offer, according to a company news release.

The company reached an agreement on Sept. 8 with its main bank creditors and bondholders that allowed it to set up a plan that Infogrames said will significantly reduce its debt, restore its equity and provide a cash level appropriate to its operating needs.

The company said the plan will allow it to stop the warning procedure engaged by the auditors under the French commercial code, to insure the continued operation of the company and to provide sufficient means for its financial reversal.

Plan terms

The plan includes a €25 million extension and rescheduling of the short-term loan within the framework of an amendment to the existing bank agreements. The short-term loan will be increased by €25 million to €45 million and the maturity will be extended to Dec. 31, 2008 from March 31, 2007.

The short-term loan will be redeemable up to €10 million by the capital increase, the balance being repaid on Dec. 31, 2008.

Also under the plan, the company will modify some terms of its 6% 2006/2008 bonds to postpone the normal redemption date of the first tranche to Feb. 15, 2007 and to amend the terms of early repayment.

The company also plans to modify some terms of its 2003/2009 Oceanes to postpone the final maturity to April 1, 2020 from April 1, 2009, to reduce the coupon to 0.01% from 4.0% and to cancel the early redemption clause in case of default.

In addition, Infogrames said it plans to conduct a €74 million capital increase with maintenance of the preferential subscription right for the existing shareholders at a subscription price of €0.15 per share.

The company said €33.7 million of the proceeds will be used to repay of all the outstanding 2006/2008 bonds, €10 million will be used for partial reimbursement of the short-term loan and €30 million will be used to fund company operations.

According to the release, the main bondholder and the company's investors are irrevocably committed to subscribe up to €33.7 million and €40 million of the shares not subscribed by the existing shareholders at the end of the subscription period.

The subscription commitments are subject to the launch of a mandatory takeover bid.

In consideration for their contribution, the bondholder and investors will receive warrants following the capital increase, which will have a three-year maturity, and entitle the subscriber to new shares at a price of €0.15, representing a total of 15% of the capital for the investors and 3% for the bondholder.

Following the capital increase, the company will launch an exchange offer on the 2003/2009 Oceanes, where each tendered Oceane will be exchanged into 32 new shares of the company.

On the basis of a €0.15 share price, the release said the exchange offer represents a price of €4.80 per 2003/2009 Oceane, for a discount of around 37.5%, compared to the redemption price of €7.53 per Oceane.

Infogrames said investors have agreed to tender 11,185,658 Oceanes to the exchange offer, or 67.8% of the outstanding Oceanes.

Under the plan agreement, the capital increase must be launched before Dec. 30, or before Feb. 15 if a new shareholders meeting has to be reconvened because of failure to meet quorum requirements.

In addition, the amendment to the terms of the 2003/2009 Oceanes is subject to completion of the exchange offer on April 30, 2007 at the latest.

Infogrames Entertainment is a computer games company based in Lyon, France.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.