Conversion of debt to equity takes claims firm private
Accident Exchange is to convert its £50m of debt into shares, forcing it to de-list from the Stock Exchange, it announced this morning.
It said holders of more than 94% by value of the debt – in the form of convertible notes – had backed the plan
“The Board believes that a conversion of the Convertible Notes is in the best interest of the Company as it will materially de-gear the balance sheet of the company by removing any obligation to repay the £63.3m otherwise due in January 2013 and will also remove the ongoing annual cash interest costs of £2.75m.”
Stock Exchange rules
But because more than 90% by value of the debt is held by five institutional holders, once turned into shares each will exceed 5% and will not be treated as being in public hands, forcing Accident Exchange to delist.
“Fewer than 25% of the Ordinary Shares will be in public hands after conversion,” it said. It will call a shareholders’ meeting to cancel its listing.
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