Funcom asks bondholders to defer company debts
The studio has summoned its bondholders to a meeting on October 26th in which they will vote on a proposal to reduce the conversion rate of each bond and extend the bonds’ maturity date for a year, giving Funcom more time to pay its debts. “The proposed amendments are intended to provide cash relief to Funcom N.V. in 2015 to allow for sufficient working capital,” the summons stated.
Funcom’s stocks have slid sharply in the wake of this news. You can read the relevant quote from the bondholders’ meeting summons after the break.
The bondholders’ meeting will be held on 26 October 2015 to vote for the following proposed amendments to the bond agreement as amended from time to time (as described in more detail in the attached summons letter):
(i) extension of the Maturity Date from 22 December 2015 to 15 December 2016;
(ii) adjustment of the Conversion Price from USD 0.37 per Share to USD 0.24 per Share;
(iii) introduction of a “Prepayment Option”, giving Funcom – under certain conditions – the possibility to redeem (all or a part of) the loans outstanding under the bond agreement.
As announced by Funcom N.V. on 13 May 2015 the proposed amendments are intended to provide cash relief to Funcom N.V. in 2015 to allow for sufficient working capital.