Egidaco successfully restructures 18% bonds after holders re-vote

By Angela McDaniels

Tacoma, Wash., June 16 - Egidaco Investments plc said all the conditions have been satisfied for the restructuring of its €70 million 18% bonds due 2011 and the new structure is in force.

As previously reported, Egidaco sent a proposal to the bondholders to amend the conditions of the bonds and to restructure its RUB 1.5 billion facility loan. The bondholders had until March 30 to submit consents.

The proposal failed to gain majority approval, and the company began soliciting consents for a new proposal on March 30.

The bondholders voted at a meeting in mid-April to approve the restructuring proposal. But on April 30, the company said it needed to issue a new voting notice to the bondholders due to a technical error in the voting documents and that a new vote would be required. The re-votes were due by June 15.

The new proposal added higher minimum equity requirements and a 2% amortization payment to be paid following the receipt of approval. This payment and two lots of semiannual interest are expected to be made June 24.

Under the original proposal, changes to the bond conditions would have included the introduction of semiannual interest payments and a mandatory amortization condition; lowering the early redemption amount to par; replacing an existing covenant with a revised covenant imposing a minimum group equity equal to $5 million and increasing to $7.5 million on Jan. 1, 2010, $12.5 million on July 1, 2010 and $20 million on Jan. 1, 2011; and introducing an obligation for the company to notify the agent of an event of default within a 30-day cure period.

The amended proposal changed the minimum equity requirement so that it will increase to $7.5 million on July 1, to $10 million on Oct. 1, 2009, to $12.5 million on Jan. 1, 2010, to $15 million on June 30, 2010 and to $20 million on Jan. 1, 2011.

The company said that based on feedback received during negotiations with the bondholders, its new proposal also gives bondholders the following benefits:

• A reduction in the senior eurobond tranche A to €59.5 million from €70 million and creation of a junior tranche B, which is subordinated and coupon deferred;

• An increase in asset coverage to 226% from 170% as a result of restructuring, rising to 309% at maturity;

• In addition to the original 18% coupon, about €15 million in accelerated cash-flows through amortization and more frequent coupon payments; and

• Restoration of the subordination layer.

E. Ohman J:or Fondkommission AB (+46 8 402 51 32) was the agent for the consent solicitation.

Egidaco is the Stockholm-based parent company of Tinkoff Credit Systems Bank, a Russian monoline bank specializing in the issuing and servicing of credit cards.

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