MVP reaches deal with bondholders

Toronto-based MVP Capital (TSE) says it has resolved a number of matters relating to proposed restructuring of about $10 million in outstanding convertible Swiss bonds.

Following discussions between MVP and Banque Indosuez, the lead manager and trustee of the bond issue, all bondholders will receive an offer to exchange their bonds for cash and preferred shares of MVP.

The offer will be mailed out to bondholders Sept. 20, and 10 days later shareholders can approve the terms of the restructuring at a special meeting at the Toronto Board of Trade starting at 10 a.m.

MVP says the exchange offer for each 5,000 Swiss francs par value bond will be a cash payment of 18% and the delivery of one voting convertible preference share, par value 4,675 Swiss francs convertible into 25,212 common shares of MVP.

Upon conversion, the preference shares will be convertible into an amount of common shares equal to 50% of the resulting equity of MVP and will automatically convert into common shares Aug. 15, 1993.

The preference shares will carry a priority over common shares in the event of windup, dissolution or liquidation of MVP.

The terms of the restructuring were negotiated on an arm’s length basis between MVP and a British merchant bank which holds most of the bonds. As a result of those discussions, the MVP board will report to a “consultative committee” consisting of members nominated by preference shareholders. The preference shareholders also retain the right to nominate a majority on the MVP board. The restructuring is still subject to regulatory approval.