HeSaLight bondholder meeting called to vote on default of 7% bonds

By Marisa Wong

Morgantown, W.Va., June 1 – The holders of HeSaLight A/S’ 7% senior secured bonds, issue 2014/2019, are being asked to vote on a proposal at a meeting on June 17, according to a notice from bond trustee Nordic Trustee A/S.

The bond trustee has been liaising with an ad hoc committee of bondholders representing more than 90% of the outstanding bonds. The committee requested the summons for a bondholders’ meeting, and its members have indicated that they will vote in favor of the proposal, the notice said.

The proposal consists of two parts. The first resolution is to declare the outstanding bonds in default under the bond agreement. The second resolution is to temporarily instruct the bond trustee not to declare the outstanding bonds, including accrued interest, due for immediate payment until the trustee receives notice from holders representing more than 50% of bonds.

To approve the first resolution, holders representing at least half of the bonds represented at the meeting must vote in favor of the resolution. The second resolution requires a two-thirds majority.

In order to have a quorum, at least half of the voting bonds must be represented at the meeting.

Background

On May 12 the Danish Business Authority published a decision ruling that the company’s accounts for 2014 were not compliant with the Danish Act on Annual Accounts.

A deadline for June 10 has been set for the company to submit updated accounts. Accounts for 2015 that had to be filed with the authority by the end of May will also have to be updated, the notice said.

The ruling said that the company failed to comply with the requirement in the bond agreement to deliver financial statements that are in accordance with GAAP. The company also failed to deliver consolidated financial statements for the group, which is also a requirement under the bond agreement.

Consequences of the ruling on the annual accounts have yet to be determined, but the company is expected to be in default with respect to its financial covenants and its dividend restrictions and may have submitted misstated compliance certificates, the notice said.

In addition, the company may have changed its business model in terms of its credit approval, acceptance and hedging policy, especially with respect to use of export credit insurance, and may have acquired subsidiaries that are undertaking business.

It also appears that the company has undertaken transactions with its principal owner that have not been included in the financial statements and may or may not have been undertaken at arms’ length terms, the notice added.

The purpose of the bondholders’ meeting is to decide on a proposal based on these circumstances.

The trustee said the committee of bondholders is not proposing to declare the bonds due for immediate payment but wants to initiate talks with the company. The intention is for the company to comment on the situation and suggest amendments to the bond agreement.

HeSaLight is an LED maker based in Roskilde, Denmark.

© 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.