Emergent offers to exchange 8.5% convertibles for new 5% notes, stock

By Marisa Wong

Morgantown, W.Va., April 18 – Emergent Capital, Inc. said it has launched an offer to exchange any and all of its outstanding $74,220,450 8.5% senior convertible notes due 2019 for $74,220,450 of a new series of 5% senior convertible notes due 2023 and the right to subscribe for an aggregate of 40 million shares of its common stock.

At the same time, the issuer is soliciting consents from the holders of the 8.5% notes to eliminate substantially all restrictive covenants contained in the indenture governing the notes, according to a press release.

Holders who tender their notes for exchange will be deemed to have given their consents to the proposed amendments.

In exchange for each $1,000 principal amount of old notes tendered by 5 p.m. ET on May 16, holders will receive the total consideration of $1,000 principal amount of new notes and the right to subscribe for 500 shares of Emergent common stock at $0.20 per share.

The aggregate principal amount of old notes tendered will be deemed to include additional old notes in a principal amount equal to accrued interest.

The exchange offer does not include an early tender consideration, the company noted.

Tenders may be withdrawn prior to the expiration of the offer. If tendered notes are withdrawn, the related consents will be considered revoked.

Once it receives the required consents, the issuer intends to enter into a new supplemental indenture to effect the proposed changes. The supplemental indenture will take effect immediately, but the provisions will not be operative until all of the tendered notes have been accepted for exchange and a series of integrated transactions (including the exchange) intended to effect a recapitalization of the company have been completed.

The exchange offer and consent solicitation are conditioned on tenders and related consents by holders of more than 98% of the outstanding notes and on the other recapitalization transactions being completed.

A meeting of shareholders is required to amend Emergent’s articles of incorporation to increase its authorized capital, which is one of the parts to the recapitalization. The date of the shareholders’ meeting has not yet been set.

The exchange offer is only being made to noteholders who are accredited investors under Rule 501(a) or non-U.S. persons under Regulation S under the Securities Act.

Emergent is a Boca Raton, Fla., specialty finance company that invests in life settlements.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.