LONDON (Alliance News) - Reconstruction Capital II Ltd Monday wrote to shareholders as it seeks their approval for a proposed issue of EUR8.5 million nominal value convertible loan notes, as well as the extension of the life of the company for a further two years until its 2016 annual general meeting.
The company is issuing the notes in order to meet "substantially" all of of its liabilities and to provide it with additional working capital for the following 12 months.
If not further ordinary shares are issued, and if conversion takes place in full, the company's enlarged share capital would be made up of 162.6 million ordinary shares. Any shareholder who doesn't subscribe for the convertible loan notes would, on conversion, suffer a maximum dilution of about 38.50% to their shareholdings in the company.
The notes attract simple interest at 10% annually. The term of the notes in three years. The notes will be secured by first ranking securities granted by the company over the shareholdings in and intercompany indebtedness owed to the company by its direct subsidiaries, RC2 (Cyprus) Ltd and Glasro Holdings Ltd. These special purpose vehicles hold the majority of the company's investments.
To date, the company has received applications from certain existing shareholders to take up EUR2.2 million of the convertible loan notes. Ion Florescu, one of its investment advisers and a former director, has undertaken to subscribe for the balance of the issue immediately following the extraordinary general meeting.
The 41.87% of shareholders have committed to vote in favour of the resolutions, the company said.
The meeting will be held on October 29 in Jersey.
Reconstruction Capital II shares Monday closed at EUR0.12.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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