Theolia says new terms on Oceanes are in effect after rights offering

By Susanna Moon

Chicago, July 20 - Theolia said the changes in the terms of the Oceanes approved by the company's bondholders on Feb. 18 and by its shareholders on March 19 became effective Tuesday upon settlement of the capital increase through a rights offering.

The change in the ratio for conversion of the Oceanes into shares will become effective on Wednesday.

The new terms of the convertibles dependant on the amount of the capital increase are the following:

• The amount of the partial early reimbursement of the convertibles will be €1.77 per note plus €0.02 interest, or €20.4 million euros in all plus €230,769 interest, on July 22;

• The buyback price of the Oceanes as of Jan. 1, 2015 will be €15.29 each, or a total of €176,423,084 if all bondholders exercise their buyback options; and

• The new conversion ratio is 8.64 until the seventh business day preceding Dec. 31, 2013.

Following the fully subscribed capital increase, the company said it issued 60,463,059 new shares.

Societe Generale is the paying agent.

On March 15, Theolia announced the upcoming shareholders' meeting in France to approve its proposed financial restructuring plan and to make decisions regarding the composition of the company's board.

On Feb. 2, the company announced the meeting for its bondholders after stating on Dec. 30, 2009 that it wanted to restructure its €253 million of 2% Oceane convertible bonds due Jan. 1, 2014 and that holders of 65.5% of the convertibles had already agreed to vote in favor of the restructuring.

Theolia said that its representatives had been in talks with Michel Meeus, Pierre and Brigitte Salik and CRC Active Value Fund Ltd., representing 9.08% of the capital and 8.76% of the voting rights of Theolia. Those holders were committed to voting in favor of the financial restructuring plan submitted to the general meeting.

They also declared themselves in favor of the completion of the capital increase planned in the context of the restructuring plan.

The company had planned to raise up to €100 million through the sale of new capital to its shareholders through a rights issue or issuance of warrants. The first €40 million was to be retained by Theolia to fund the development of its pipeline of projects, and the remainder was to be used to fund an early partial repayment of the convertibles.

The convertibles have a put option on Jan. 1, 2012. Theolia already said that it expected to have difficulty borrowing or acquiring the funds needed to buy back the convertibles if this option is exercised.

At a company board meeting on March 11, the directors decided to support Meeus' proposal of Fady Khallouf and Gιrard Creuzet as independent directors of the board and also Meeus himself as a shareholder board director.

In addition, Theolia's board decided to approve the idea of opening the board to three new members who represent the largest shareholders when the ordinary general shareholder meeting was held to approve the accounts of the financial year ended Dec. 31.

As a result of board support, Meeus and the aforementioned investors agreed to ask for the removal of the draft resolutions he proposed, which call for the removal of certain Theolia board directors.

Overall, the company said it welcomed the support of its shareholders for the financial restructuring plan originally announced on Dec. 29.

As a precautionary measure, the company already requested and obtained the appointment of a mandataire ad-hoc, a special-purpose trustee.

In addition, the board of directors previously retained the firm Ricol Lasteyrie as an independent financial expert to examine the financial conditions of the proposed restructuring and its impact.

As already stated, the company said that a failure of the restructuring could force it to consider creditor protection under French law.

The proposed restructuring of the convertibles included:

• The removal of the Jan. 1, 2012 put option;

• The extension of the maturity date to Jan. 1, 2041;

• The addition of a new put option on Jan. 1, 2015. The redemption price will depend on the amount raised through the capital increase and will range from 50% to 77.4% of the current redemption value, or from €10.97 to €16.99 per convertible;

• The early redemption of up to €60 million of the convertibles. The amount to be redeemed will depend on the amount raised through the capital increase;

• An increase in the coupon to 2.7%. It will then decrease to 0.1% on Jan. 1, 2015;

• An improved conversion ratio. The initial conversion ratio will be determined based on the amount raised in the capital increase. On Jan. 1, 2014, the conversion ratio will change to 80% of the initial conversion ratio;

• The removal of the bondholders' right to convert or exchange their bonds into shares beginning Jan. 1, 2015;

• A change-of-control clause that remains applicable, provided that it will allow every bondholder to request early redemption and that this clause will not apply in the event where a capital increase linked to the restructuring would trigger a change of control of Theolia;

• The removal of the temporary adjustment mechanism of the conversion ratio in the event of a tender offer for the company's shares; and

• The change of the new shares' issuance date upon the bonds' conversion that will from now on apply at the time of delivery and will be from their issuance entirely assimilated to the existing shares.

The completion of the restructuring plan required bondholder approval, shareholder approval and the completion of the capital increase for €100 million. Under some circumstances, the minimum amount would be €60 million.

Approval was needed from at least two-thirds of the voting rights present or represented at the bondholder and shareholder meetings.

Theolia develops and operates wind energy projects and is based in Aix-en-Provence, France.

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