Ruric announces a proposal for a composition
(Thomson Reuters ONE) - In house translation of swedish originalToday Ruric, together with the administrator that the District Court ofStockholm appointed on 10 November 2009, Roland Sundquist, Gr?rgsAdvokatbyr?has sent a proposal for a composition to the creditors- In my view, the presented proposal is balanced and observes thecreditors' interest within the framework that is practically possible toaccommodate, given the financing possibilities, Roland Sundqvist says.The proposal for a compositionThe composition contains two alternatives.Alternative No.1 contains a cash component representing 5% of total claim, a newsecured bond corresponding to 66,5% of the claim, and the remaining 28,5% is tobe converted into shareholding in the company at a conversion price of SEK 7 -described in more detail in the attached proposal, that also containsprovisions.Alternative No.2 is constructed as a plain cash alternative - a 55% composition.The composition is to be financed by a rights issue amounting to SEK 110 millionat a price of SEK 3 and a convertible issue amounting to maximum SEK 79 millionwith a conversion price of SEK 7 . The convertible is only to be issued shouldthe acceptance for the cash alternative exceed 20% of the total claim. Bothissues are intended to be guaranteed by current share holders and externalguarantors. The company will revert with a notice convening an extraordinaryshare holders' meeting and also with complete proposals for resolutions.In his opinion on the composition proposal, the administrator recommends thatthe offer should be accepted. The crucial point, in the opinion of theadministrator, is to evaluate the results of a property sale and sale ofexploitation rights in development projects during a bankruptcy. Theadministrator finds that a dividend in bankruptcy is uncertain and he considersthat it could hardly be expected to exceed 40 percent. Valuation opinions havebeen obtained on an assessed outcome at an imaginary bankruptcy liquidationsale. With this view, the administrator considers both alternatives as beingsubstantially better for creditors than a bankruptcy option.In the estate inventory as at 31 December 2009, as attached to theadministrator's report, the company's assets, based on indirect wholly andpartly owned investment properties and real estate projects, are valued atapproximately SEK 405 million based on the assumption of the sale in bankruptcy.The total assets are valued to about SEK 443 million. Liabilities are recordedat about SEK 976 million.Creditors are requested to express their willingness to accept the compositionproposal to the administrator by 26 February 2010. If at least 40 percent of thenumber of creditors holding at least 40 percent of the claims expresseswillingness to accept the composition, the company will apply at the DistrictCourt to request a composition negotiation. For adoption, the composition isrequired to be accepted by at least 60 percent of the number of creditors votingholding at least 60 percent of the claims.Special Balance Sheet for equity control (sw. Kontrollbalansr?ing)As a precaution, the company's board has decided to immediately prepare, andallow the company's auditor to examine a special balance sheet for equitycontrol, since the Board suspect that under the prevailing circumstances, theremight be reason to believe that the company's equity is less than half of theregistered share capital. The Board has taken this decision in light of thevaluation estimates of the Company's, and its subsidiaries' assets that has beenprepared for the procedure of reorganization.If the audited special balance sheet shows that the company's equity is lessthan half of the registered share capital, the Board will as soon as possible,convene an extraordinary shareholders' meeting which will decide whether thecompany should go into liquidation, or whether operations should continue.The current proposal for composition contains measures that, if accepted andimplemented, will reduce liabilities and increase equity, and will thus put thecompany in a position to waive the circumstances that give reason to thedecision to prepare the special balance sheet.AttachmentsThe attachments will be available in English onwww.ruric.com
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Datum: 11.02.2010 - 02:28 Uhr
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