Omni Energy defaulted on $2.8 million of convertibles, says Portside

By Ted A. Knutson

Washington, March 3 - Omni Energy Services Corp. said it received a notice of default from Portside Growth and Opportunity Fund on Feb. 25 relating to $2.765 million in 6.5% convertible debentures.

Portside demanded redemption of the securities March 2, claiming the issuer had failed to make interest and put payments and did not hold a shareholders meeting, Omni said in an 8-K filing with the Securities and Exchange Commission.

The default notice came exactly one month after Carencro, La.-based Omni sued Portside and the other holders of its 6.5% debentures in the U.S. District Court for the Western District of Louisiana, claiming the investors illegally tried to manipulate the price of its stock through "short-swing trading."

Omni noted the debentures require it to redeem the securities by March 9 or pay Portside 10% interest or the highest legally allowable rate until the mandatory redemption price has been paid.

At the same time, Omni said no other holder of its debentures has mandated that the redemption price be paid and that Portside is not eligible for early redemption payments without the prior consent of Omni's agent.

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