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Orco: Conference call on ColOG deal

24/06/2009 par Ancien4425 0
Orco: Conference call on ColOG deal



Orco’s CEO Jean-François Ott spoke at a conference call with analysts and

investors regarding the details of the ColOG deal yesterday afternoon. The

main points of the conference call were as follows:



· The success of the deal depends on Orco’s bond restructuring

program, which will start in the next few days.



· The CEO said that the change in the terms of the deal came after a

decision to give current shareholders similar rights to subscribe as

those to be held by Colony Capital.



· No definition was given of what ‘successful’ bond restructuring

means and Colony Capital is not bound in any way by the current

terms; a final decision will be made in November.



· The bond restructuring program has not yet been completely

defined: among possible solutions are fully or partly exchanging

bonds for equity, or changing the bond conversion ratio and term.



· Orco will negotiate with all bond holders to propose a unified

solution. The negotiations will take place until September, when a

meeting of bond holders must approve the proposed solution with a

two-thirds majority.





Our view (KBC Securities / Patria) :

We remain negative on the company. A possible exchange of bonds into

equity will lead to a dilution effect for existing shareholders (although the

extent depends on the negotiations with bond holders), while the ColOG

deal now seems more distant and uncertain.



lucian.albulescu AT kbcsecurities.ro





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