27th Jun 2016 08:02
LONDON (Alliance News) - MirLand Development Corp PLC Monday said it has filed an application to the District Court of Cyprus to convene a meeting with the company's bondholders and shareholders to seek approval for the company's debt settlement and restructuring plan.
The Russian residential and commercial property developer said back in April that the proposals would see about USD180 million of debt converted into equity, leaving about USD45 million of outstanding bonds remaining. They 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. There also will be no 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% in 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.
MirLand reiterated the terms of the plan on Monday, and said it has now formally requested a meeting with bondholders and an extraordinary meeting for shareholders. Importantly, MirLand said all other shareholders of the company will have the opportunity to participate in an open offer of shares prior to the plan being completed.
"It should be emphasized that the settlement has not yet been approved by any parties. The coming into effect of the settlement is subject to the fulfilment of all of the conditions precedent as detailed in the settlement," said MirLand.
"The company will make further announcements in due course," it added.
MirLand shares were untraded early Monday at 20.00 pence.
By Joshua Warner; [email protected]; @JoshAlliance
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