Virgin Media 2011 Annual Report Download - page 77

original sterling denominated outstanding notes, for an equivalent amount of newly issued senior secured notes
due 2021. Holders of the original senior secured notes due 2021 who did not tender their notes in compliance
with the offer terms will remain subject to restrictions on transfer of these notes. Completion of the exchange
offer satisfied our obligations in full under a registration rights agreement entered into in connection with the
original notes issuance in March 2011. We did not receive any additional proceeds from the exchange offer. For
further details relating to the exchange offer, please see the Registration Statement on Form S-4 of Virgin Media
Inc., as filed with the SEC on July 20, 2011.
The senior secured notes due 2018 and the senior secured notes due 2021 rank pari passu with and, subject
to certain exceptions, share in the same guarantees and security which has been granted in favor of our senior
credit facility. See “Senior Credit Facility—Guarantees: Security”.
Convertible Senior Notes
In April 2008, Virgin Media Inc. issued U.S. denominated 6.50% convertible senior notes due 2016 with a
principal amount outstanding of $1.0 billion. The convertible senior notes are unsecured senior obligations of
Virgin Media Inc. and, consequently, are subordinated to our obligations under our senior credit facility and rank
equally with Virgin Media Inc.’s guarantees of the senior notes. The convertible senior notes bear interest at an
annual rate of 6.50% payable semi-annually on May 15 and November 15 of each year, beginning November 15,
2008. The convertible senior notes mature on November 15, 2016 and may not be redeemed by us prior to the
maturity date. Upon conversion, we may elect to settle in cash, shares of common stock or a combination of cash
and shares of our common stock. Our current report on Form 8-K, as filed with the SEC on April 16, 2008
contains a more detailed description of the terms of our convertible senior notes.
Holders of convertible senior notes may tender their notes for conversion at any time on or after August 15,
2016 through to the second scheduled trading date preceding the maturity date. Prior to August 15, 2016, holders
may convert their notes, at their option, only under the following circumstances: (i) in any quarter, if the closing
sale price of Virgin Media Inc.’s common stock during at least 20 of the last 30 trading days of the prior quarter
was more than 120% of the applicable conversion price per share of common stock on the last day of such prior
quarter; (ii) if, for five consecutive trading days, the trading price per $1,000 principal amount of notes was less
than 98% of the product of the closing price of our common stock and the then applicable conversion rate; (iii) if
a specified corporate event occurs, such as a merger, recapitalization, reclassification, binding share exchange or
conveyance of all, or substantially all, of Virgin Media Inc.’s assets; (iv) the declaration by Virgin Media Inc. of
the distribution of certain rights, warrants, assets or debt securities to all, or substantially all, holders of Virgin
Media Inc.’s common stock; or (v) if Virgin Media Inc. undergoes a fundamental change (as defined in the
indenture governing the convertible senior notes), such as a change in control, merger, consolidation, dissolution
or delisting.
The initial conversion rate of the convertible senior notes represents an initial conversion price of
approximately $19.22 per share of common stock. The conversion rate is subject to adjustment for stock splits,
stock dividends or distributions, the issuance of certain rights or warrants, certain cash dividends or distributions
or stock repurchases where the price exceeds market values. In the event of specified fundamental changes
relating to Virgin Media Inc., referred to as “make whole” fundamental changes, the conversion rate will be
increased as provided by a formula set forth in the indenture governing the convertible senior notes.
Holders may also require us to repurchase the convertible senior notes for cash in the event of a fundamental
change (as defined in the indenture governing the convertible senior notes), such as a change in control, merger,
consolidation, dissolution or delisting (including involuntary delisting for failure to continue to comply with the
NASDAQ listing criteria), for a purchase price equal to 100% of the principal amount, plus accrued but unpaid
interest to the purchase date.
If the trading price of our common stock exceeds 120% of the conversion price of the convertible notes for
20 out of the last 30 trading days of a calendar quarter, holders of the convertible notes may elect to convert their
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