13th Apr 2016 13:02
LONDON (Alliance News) - MirLand Development Corp PLC, the Russian residential and commercial property developer, on Wednesday said bondholders are set to vote on proposals that would see about USD180 million of debt converted into equity.
That would leave about USD45 million of outstanding bonds remaining, MirLand said in a statement, which will continue to be unsecured. Repayment will begin in 2021, with three equal annual instalments. It will bear an annual interest of 1.0%, which will start to be paid in December 2017.
Under the proposals, MirLand said it will have the right to repay the remaining debt at any time and at its discretion without incurring any fees or penalty. Nor will there be any limitation or restriction on the company raising any additional secured debt. Events of default will only be in accordance with Israeli securities law.
Jerusalem Economic Ltd, Industrial Building Corp Ltd and Darban Investments Ltd, currently the controlling shareholders of the company, will be asked to commit to providing funding of USD25 million in total, including USD4 million previously provided, in return for an equity stake of about 40% of the company. The bondholders will hold the remaining 60%.
Of the USD25 million, MirLand said, USD5 million is to be paid to the bondholders, excluding the controlling shareholders and members of the Fishman family, pro rata to their holdings of bonds in the company.
"If and when the principles of the proposed new restructuring terms are approved by the bondholders and presented to the company for their consideration, the board of directors of the company will review them and, if necessary, seek further information and/or clarification," MirLand said in a statement.
The company said its understanding is that bondholders are due to vote on the proposed restructuring terms on Thursday.
Shares in MirLand were down 12% at 32.00 pence on Wednesday afternoon in London.
By Samuel Agini; [email protected]; @samuelagini
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