Emerging Europe bondholders approve longer maturities on two issues

By Susanna Moon

Chicago, June 27 – Emerging Europe Land Development AS holders agreed to extend the maturities of its 15% callable bond issue 2013/2014 and 25% callable bond issue 2012/2014 at a meeting held on Friday.

No bondholders voted against the original proposal or the alternative proposal. Because the original proposal failed to reach the needed majority, the alternative proposal was adopted. There were enough holders to form a quorum.

Under the alternative proposal, the maturities of both bond issues will be extended until Dec. 30, 2014 while the interest rates will be maintained, according to a notice from bond trustee Nordic Trustee ASA.

The company originally sought to lower the interest rates and extend the maturities of both bond issues, saying that changes were needed to address the company’s financial situation.

The company’s commercial shopping center in Croatia, called TC Lumini, has opened and is operating according to plan, according to Emerging Europe Land Development.

However, an additional NOK 9 million to NOK 12 million of working capital is needed. The company is proposing to finance this through additional tranches under its 15% bond issue.

The company sought to cut the interest rate on the 15% first-priority bonds to 6%, to extend the maturity to June 30, 2015 from June 30, 2014 and to pay accrued interest as of June 30, 2014 in kind.

For the 25% second-priority bonds, the company sought a reduction in the interest rate to 15% and, as with the 15% bond, an extension of the maturity to June 30, 2015 from June 30, 2014.

Additional mortgage security was to be provided for the 25% bond to cover interest up to the maturity date.

The company said it would not be able to repay the bonds on the original maturity date.

Emerging Europe is a property investment and real estate management services company based in Oslo.

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