29th Sep 2015 13:00
LONDON (Alliance News) - Origo Partners PLC Tuesday said it has proposed a restructuring of its convertible zero dividend preference shares with the holders of those shares after uncertainty cast doubt that the company could redeem the shares by March 2016.
Under Origo's investment policy and articles of association, Origo is required to undertake a USD12.0 million convertible zero dividend preference share tender offer before March 8, 2016.
On Tuesday, Origo said it remains "confident" of delivering its investment policy, under which the company is now seeking to divest its entire portfolio over a period of no longer than 4 years, but said uncertainty in relation to the Chinese economy and depressed commodity markets have meant that realisations of the company's assets at attractive valuations have been challenging in the short term.
Therefore, the company said it was "possible" that it might not be in a position to redeem the USD12.0 million convertible zero dividend preference share tender offer before March.
"The company has therefore worked with the main CZDP shareholders to form a set of proposals which would restructure the CZDPs and would provide Origo with greater flexibility to implement its orderly realisation strategy - with a view to maximising value on behalf of Origo's shareholders," it said in a statement.
Under the proposals, Origo has asked for the removal of the requirement to undertake the transaction by March 8, 2016. It has also asked to reset the principal amount of each convertible zero dividend preference share to USD1.28.
Origo also proposes that its ordinary shareholders receive a proportion of all future distributions alongside CZDP shareholders on a pro-rata basis. Under that proposal, the first USD40 million of distributions will be split 12.5% to ordinary shareholders with the remainder going to CZDP shareholders.
The next USD40 million of distributions would then be split 30% to ordinary shareholders with the balance going to CZDP shareholders. Any further distributions beyond that would be split 70% to ordinary shareholders and 30% to CZDP shareholders until distributions equal to the accreted capital amount have been made to the CZDP Shareholders.
Following that, all distributions would then go to ordinary shareholders, it said.
The proposals remain subject to the negotiation of appropriate agreements and amendments to Origo's articles of association and approval at a general meeting of Origo and separate class meetings of the CZDP Shareholders and of the ordinary shareholders.
"The directors of the company believe that that the proposed settlement of the dispute and restructuring will benefit the company and all of its shareholders. The company is in the process of finalising a set of detailed proposals, which will be put to Origo's shareholders as soon as is practicable," it said in a statement.
Origo shares were down 6.3% to 2.60 pence per share on Tuesday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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