Ergis

financial statements and business information

18 November 2009, 09:55

CLOSING OF THE ADDITIONAL SUBSCRIPTIONS FOR CONVERTIBLE BONDS OF THE ERGIS GROUP

The ERGIS Group in additional tranche of subscriptions for private issue of series A bonds, has accepted subscriptions for the total remaining sum amounting to PLN 4,000,000.

The total value of the issue of series A convertible bonds has therefore increased up to PLN 30,000,000 and their number amounts to 30,000, representing 100% of the value and number of convertible bonds; the issue was approved by the Company’s Extraordinary General Shareholders Meeting on 28 October 2009. Convertible bonds will be taken up and paid for once the Extraordinary General Shareholders Meeting’s resolutions are registered by a competent registration court. The Management Board expects that this will have taken place by the end of November 2009. Funds from the bond issue shall be used for a repayment of tranche B of a loan contracted for the purchase of shares in MKF-Folien GmbH and Schimanski GmbH, which is due at the end of January 2010.

KEY INFORMATION REGARDING BOND ISSUE

Type of bonds issued

Dematerialised bearer bonds convertible into shares.

Volume of the issue

30,000 Series A Bonds.

Par value and issue price

 

Par value of one Series A Bond amounts to PLN 1,000 and total par value of all Series A Bonds amounts to PLN 30 million.

Issue price is equal to the par value.

The principles governing the conversion of Series A Bonds into Series H Shares

 

a)    The right to take up Series H Shares by means of converting Series A Bonds into Series H Shares may be exercised on each first business day following the maturity date for the interest on the Series A Bonds based on a previously submitted statement of the intention to convert the Series A Bonds, provided that such statement shall be submitted to the Issuer at seven calendar days preceding the conversion date at the latest.

b)    If the conversion date falls on Saturday, Sunday a holiday or a public holiday, the conversion shall be performed on the first business day following that day.

c)    The last date for exercising the right to take up Series H Shares by way of converting Series A Bonds expires on the day when the 48-month period starting on the Series A Bond allocation date lapses.

The price of conversion (issue price) of one Series H Shares has been set at PLN 4.  

Terms of redemption and interest

 

a)    Series A Bonds which will not be converted to Series H Shares shall be redeemed by the Issuer within 48 months from the Bonds allocation date. The Bonds shall be redeemed for the payment in cash in the amount equal to their par value.

b)    In the event that control is taken over the Issuer, the control being understood as holding more than 50% in the total number of votes at the General Shareholders Meeting of ERGIS-EUROFILMS S.A. by one entity, all Series A Bonds shall be subject to a prompt early redemption by ERGIS-EUROFILMS S.A. within 7 days from a public announcement of the information on the number of the Issuer’s shares held by such entity.

c)    In the event that ERGIS-EUROFILMS S.A. is liquidated or transformed, all Series A Bonds shall be subject to a prompt early redemption on the day when the decision on registration of ERGIS-EUROFILMS S.A. transformation becomes final, or on the day when the liquidation procedure is commenced.  The right to convert the Series A Bonds convertible into Series H Shares expires on the day of opening the liquidation or transformation.  

d)    If ERGIS-EUROFILMS S.A. fails to make a payment of any interest, and such a failure is not remedied by paying the interest amount payable to the Bondholders by the end of the 7th business day following the interest Period, a Bondholder may submit to ERGIS-EUROFILMS S.A. a written demand to pay the interest due.  Having received a written demand, ERGIS-EUROFILMS S.A. must make the payment to the Bondholder within 14 days. Following the lapse of that time limit, the Bondholder may demand that ERGIS-EUROFILMS S.A. performs an early redemption of Bonds, by submitting a written demand to ERGIS-EUROFILMS S.A. whereby Series A Bonds held by the Bondholder become immediately due and payable following the delivery of the demand.

The redemption of Series A Shares shall be effected by making a payment for each Series A Bond of a cash amount equal to the par value of Series A Bond. On the redemption date, ERGIS-EUROFILMS S.A. shall pay the interest due.  

The Bonds become redeemed upon redemption.

Series A Bonds bear interest at a variable interest rate at a 6M WIBOR plus 3% margin p.a.

Security of the Bonds

Series A Bonds are unsecured.

Principles of converting the value of a non-cash payment into a cash payment.

 

Terms and conditions of Series A Bonds do not provide for a non-cash payment other than the conversion into the Series H Shares. A cash payment for the benefit of the Bondholder, in exchange for a failure to make a non-cash payment is provided only for cases described in section 5 (Additional Bonus).  In some cases, the provisions of section 6 may also be interpreted as a basis for making a cash payment instead of a non-cash payment.

Total number of votes at ERGIS-EUROFILMS S.A. General Shareholders Meeting if conversion of all issued Bonds took place

If all issued Series A Bonds were converted, entities which made the conversion would be entitled to 7,500,000 votes at the General Shareholders Meeting of ERGIS-EUROFILMS S.A.

Total number of votes at ERGIS-EUROFILMS S.A. General Shareholders Meeting if conversion of all issued Bonds took place

If all issued Series A Bonds were converted into shares, the total number of votes at the General Shareholders Meeting of ERGIS-EUROFILMS S.A. would be 46,935,989.  

“We are very pleased with the wide interest in our issue which has translated into the additional subscription for convertible bonds of our Company. By obtaining PLN 30,000,000 from this issue we achieved the assumed goal of the bond issue, as approved by the Company’s Extraordinary General Shareholders Meeting, in 100%. This is a very good piece of information for our shareholders. The funds acquired from the bond issue shall allow us to reduce the bank debt, thus facilitating further development of the Company," comments Tadeusz Nowicki, the President of the Management Board of ERGIS-EUROFILMS S.A.

ADDITIONAL INFORMATION

ERGIS Group is Central and Eastern Europe's leading manufacturer of PVC products: films, compounds, wallpapers, wall panelling, and windowsills. The Company's offer includes films laminated with a layer of another film, paper, woven and non-woven fabric, etc. printed films, insulation films, packaging films (including films for packaging pharmaceuticals), bus floor covering, compounds for cable manufacturing, interior and exterior wall panels, expansion joint tapes, artificial leather, coated fabrics, tablecloths, and vinyl and paper wallpapers. Additionally, the Group is Poland's largest manufacturer of stretch films (tensile films, used e.g. for wrapping loads on pallets, PVC thermoshrink films (used, e.g. for food packaging) and PET and PP tapes (used for fastening medium heavy and heavy products and loads), as well as a distributor of polypropylene BOPP film (used mainly for packaging manufacturing). The Group manufactures also packaging film for food industry (laminates, single layer films, rigid films, flexible films, ‘skin’ films), as well as flexible packaging films and multi-layer laminates.

Additional information is also available at www.ergis-eurofilms.eu