TIDMMLD
RNS Number : 3894S
Mirland Development Corporation PLC
07 July 2015
7 July 2015
MirLand Development Corporation plc
("MirLand" or the "Company")
Bonds update
Further to its announcement on 1 April 2015, regarding
indicative non-binding debt restructuring terms (the "Arrangement")
with the trustees of the Series A-F bondholders ("Bondholders"),
the Company announces it has now made an application to the Cypriot
Court to sanction the convening of meetings of the Bondholders and
shareholders of the Company to approve the Arrangement.
The key terms of the proposed Arrangement are as follows:
1. Payments of principal are currently postponed for 3 years and
6 months (30 July 2018) and once the Arrangement becomes effective,
the interest payments due for all Series of Bonds in 2015, together
with interest payments of Series A and B Bonds deferred from 2014,
will be paid in full on the Arrangement becoming effective.
2. As of the execution of the Arrangement the interest on the
Series A-F bonds will increase by 1.25% to the current base
interest of each bond series with this additional interest being
added to the principal and paid off with the principal payments on
the Arrangement becoming effective.
3. Interest payments for Series A-F bonds will be paid in
2016-2017 annually on the same day each year and as of 2018 in two
fix dates on the same day each year. All future interest payments
will be paid in full although 50% of payments due in 2016 may be
deferred at the option of the Company subject to certain
conditions. In this case, from 31 December 2016 until fully paid,
the deferred interest payments will bear an interest of 2.50%
(including the 1.25% additional interest detailed in paragraph 2
above).
4. Should the Company exercise its right to defer interest
payments, Darban Investments Ltd, Jerusalem Economy Ltd. and
Industrial Buildings Corporation Ltd (together the "Majority
Shareholders") shall provide either by exercise of its share
options (referred to in paragraph 8 below) or by providing a loan
to the Company in an amount equal to USD15million less any amounts
subscribed for pursuant to the exercise of such options together
with any amounts subscribed for pursuant to the open offer
(referred to in paragraph 5 below) by the Majority
Shareholders.
5. The Majority Shareholders will participate in an issue of
approximately USD12.885 million of new shares (in which all other
shareholders of the Company will have the opportunity to
participate by means of an open offer) of which approximately
USD6.1 million will be subscribed for shortly after the Arrangement
becomes effective and the rest (according to their holdings in the
company at the date of the open offer) by no later than 30 June
2016. If either issue is not fully subscribed for by the Majority
Shareholders they are required to exercise certain of their options
or provide a dollar bearing loan to the Company, to the extent that
other shareholders of the Company do not take up their entitlements
under the open offer.
6. Should the Majority Shareholders not comply with the
provision above they will be required to transfer a controlling
equity interest in the Company to the Bondholders, which will be
placed with an escrow agent.
7. Bondholders will be issued with 5.5% of the Company's
existing issued share capital together with options (of three
different types - A, B and C) with 12% of the issued share capital
at an exercise price discounted to the prevailing market price.
8. Type A options will also be granted to the Majority
Shareholders in such number that would enable them, in the event
that no options other than Type A options are exercised, to hold a
maximum of approximately 84% of the issued share capital of the
Company (being their existing interest).
9. All bond payments with regards to the bonds held by the
Majority Shareholders shall not be paid until June 2019. These
bonds shall bear interest referenced to a prevailing consumer price
index and will be paid in one payment at the end of June 2019. The
Majority Shareholders will also be restricted from selling their
bonds until the 30 June 2019. These restrictions will not, however,
apply with respect to several entities included in the Majority
Shareholders, if Mr Eliezer Fishman is no longer a direct or
indirect majority shareholder.
10. Upon the completion of the Arrangement, officers, directors,
employees and the Majority Shareholders of the Company and their
consultants shall receive full waiver from any claims by
Bondholders via the Trustees, excluding any criminal, fraudulent or
malicious actions.
11. The completion of the Arrangement is conditional upon (a)
approval of the Company's shareholders; (b) approval of the Tel
Aviv Stock Exchange and Israel Securities Authority; (c) approval
of the Bondholders; (d) approval of the Cypriot Court of the
Arrangement; (e) receiving a ruling from Israel Tax Authority; and
(f) execution of a new Trust Deed with the Trustees on behalf of
the Bondholders.
12. The Company will be entitled to repay bonds prior to the
maturity date without penalty until 31 July 2019.
13. Restrictions on payments of dividends, the purchase and
disposal of assets, the business of the Company and related party
transactions along with financial covenants will be placed on the
Company and the Company will provide a negative pledge to the
Bondholders by way of security. The Bondholders will also have the
power to appoint a director.
In addition to the terms of the Arrangement provided to the
Cypriot Court, the amendment set out below has been agreed between
the Bondholders and the Company. A further application will be made
to the Cypriot Court to amend the Arrangement accordingly.
At the earlier of either three months from the increase in the
debt rating of Jerusalem Economy Ltd (one of the Majority
Shareholders) to a rating of "A" (or higher); or upon each of 1
August 2016 and 31 December 2016, the Majority Shareholders will
either, at their sole discretion:
1. exercise options allocated to them under the Arrangement for
consideration of at least USD5 million; or-
2. procure that the Company will issue to Bondholders additional
shares, for no consideration, a further 5% of its existing issued
share capital.
The Majority Shareholders will be expected to make a cumulative
capital injection of up to USD 10 million or issuance of up to 10%
of the share capital.
It should be noted that this amendment has not yet been
submitted to the Cypriot Court. However, it will be presented at
the meeting of the Bondholders for their approval pursuant to the
entire Arrangement.
Upon the Arrangement becoming effective, the terms also require
the admission of the entire issued and to be issued share capital
of the Company to trading on the Tel Aviv Stock Exchange. The
Company's shares will continue to be admitted to trading on
AIM.
The terms of the Arrangement are to be sanctioned by the Cypriot
Court and is subject to further approvals as set out above. Further
information will be included in the circular to be sent to
shareholders of the Company to approve the Arrangement.
The Arrangement would also represent a related party transaction
pursuant to the AIM Rules for Companies.
Further updates will be provided in due course.
MirLand Development Corporation +7 495 787 49
plc 62
Roman Rozental +7 499 130 31
roman@mirland-development.com 09
FTI Consulting
Dido Laurimore / Ellie Sweeney/Tom
Gough +44 20 3727 1000
Investec Bank plc
Jeremy Ellis / David Anderson +44 20 7597 4000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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