KongZhong prepays 70% of convertibles at premium in first quarter

Prepaid notes were convertible into 3.5% of outstanding shares

By Angela McDaniels

Tacoma, Wash., May 24 - KongZhong Corp. prepaid 70% of its five-year convertible notes on Feb. 25, according to its earnings release for the first quarter.

The company paid $9.31 million plus accrued interest.

The prepaid notes were convertible into 1.33 million American Depositary Shares equivalent to 53.2 million ordinary shares, which represented about 3.5% of the company's total shares outstanding as of Dec. 31.

The company issued $6.8 million of the notes to Nokia Growth Partners in a private placement in March 2009.

The Beijing-based digital entertainment provider recorded a $1.6 million non-cash charge to its first-quarter earnings as a result of the premium paid to the underlying conversion price of the notes.

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