MirLand Development reaches settlement agreement with bondholders

By Sheri Kasprzak

New York, July 20 – MirLand Development Corp. plc entered into a settlement agreement with its bondholders, the company announced in a statement Wednesday. The settlement was approved by the corporation’s board of directors.

As part of the agreement:

• 80.5% of the company’s enlarged share capital will be converted and a new bond series having a $45 million principal amount will be issued;

• The controlling companies, Jerusalem Economy Ltd., Industrial Buildings Corp. Ltd. and Darban Investments Ltd., have agreed to subscribe for up to $14.1 million of new equity in the company, including the capitalization of a $6.1 million loan previously provided to the company, subject to clawback in respect of valid applications received from shareholders other than the controlling companies in respect of an open offer expected to be made by the company;

• Upon completion of the settlement, the company will issue to the relevant management options, representing, if exercised, 9% of the issued share capital of the company on a fully diluted basis subject to certain vesting criteria;

• The principal of the new bonds will be repaid through three equal payments on Dec. 31, 2021, Dec. 31, 2022 and Dec. 31, 2023;

• The principal bears interest at an annual fixed rate of 1%, which will accrue until December 2017 and will start to be paid from December 2017;

• The company has the right to repay the new series amount at any time and at its sole discretion without fees or penalties;

• The company will not be obligated to any restriction and/or financial covenants and will be free from any limitations on the taking of loans and/or financial undertakings and granting any securities to guarantee such;

• The right to demand the immediate repayment of the new series will only be granted if circumstances listed in Section 35I1 of the Israeli Securities Law are met and are subject to the provisions of the new trust deed that will be adopted.

The Cyprus-based real estate developer primarily functions in Russia but also has subsidiaries in Israel and Hungary.

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