Orckit Communications obtains district court approval of arrangement

By Caroline Salls

Pittsburgh, June 20 - Orckit Communications Ltd. has received the final approval of the District Court of Tel Aviv for the arrangement with the holders of the company's series A convertible notes and series B convertible notes, according to a news release.

The district court approval followed the approval of the Tel Aviv Stock Exchange and the Israel Securities Authority.

Orckit said the arrangement is expected to take effect at a closing to be held next week.

Arrangement terms

Under the arrangement, the conversion price of the series A notes will be reduced to NIS 1.38 per share, or about $0.36 per share, from NIS 63.00, or about $16.34 per share, during the period expected to begin on July 2 and end on July 21.

After that, the conversion price of the series A notes will increase to NIS 7.61 per share, or about $1.97.

Meanwhile, the company said the conversion price of the series B notes will be reduced to NIS 7.61 per share, or about $1.97, from NIS 10.00, or about $2.59 per share during the period expected to begin on July 2 and end on July 11.

After that period, the conversion price of the series B notes will be further reduced to NIS 1.83 per share, or about $0.47, for the period expected to end on Aug. 5. Then, the conversion price of the series B notes will return to NIS 7.61 per share.

Currently, the company said it has the right to force conversion of the series A notes at $16.34 per share if the prevailing market price of its ordinary shares is at least $30.00 per share and does not have the right to force conversion of the series B notes.

Starting on July 21 for the series A notes and starting on Aug. 6 for the series B notes, the company will have the right to force the conversion of the series A notes and/or the series B notes at the price of $1.97 per share if the prevailing market price of its ordinary shares is at least $3.00 per share.

Conversion plans

According to the release, Orckit co-founder and president Izhak Tamir and co-founder and chief executive officer Eric Paneth have each notified the company that they plan to convert all of their series B notes during the conversion period.

Taken together, the conversion of series B notes in the total principal amount of NIS 7.28 million, or about $1.89 million, will result in the issuance of 3.98 million ordinary shares.

"If an ample amount of our notes will be converted during the conversion period, our balance sheet, which was a concern to our customers, will be strengthened and Orckit will be well positioned to capitalize upon these opportunities," Tamir said in the release.

Orckit is a Tel-Aviv, Israel-based maker of broadband telecommunications equipment.

© 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.