Atari 2009 Annual Report Download - page 92

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
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 The second simplified offer for the OCEANE 2000-2005 bonds took place between March 9 and March 31, 2005
with the Company offering to exchange each bond tendered to the offer for €11.20 in cash, 10 new Company shares
and one Company note (the 2006-2008 Notes). On April 7, 2005, the AMF issued notice no. 205C0605 reporting
that 2.403.772 OCEANE 2000-2005 bonds had been tendered to the offer, which meant that 135.031 OCEANE
2011 bonds were outstanding as of March 31, 2005.
The conversion and/or exchange ratio was adjusted to 21.524 shares for one OCEANE 2011 bond following the rights
issue of January 2007, then to 24.718 shares per OCEANE 2011 bond following the distribution of free stock warrants to
all shareholders, and lastly to 0.247 shares per OCEANE 2011 bond to reflect the reverse stock split. Lastly, following
the issue of the ORANE convertible bonds with stock warrants attached on December 9, 2008 (see Note 1 – Significant
events of the year), the ratio was further adjusted to 0.24874 shares per OCEANE 2011 bond in February 2009 in order
to take account of the issuance of pre-emptive subscription rights in connection with these ORANE-BSA bonds.
As of March 31, 2009 and 2008, there were a total of 135.031 OCEANE 2011 bonds still outstanding, which could be
converted into or exchanged for 33.587 Atari shares, with none of said bonds held by the Company at those dates.
OCEANE 2003-2009 BONDS, NOW OCEANE 2003-2020 BONDS
On December 23, 2003, the Company issued 16.487.489 bonds (the "OCEANE 2020 bonds") with a nominal value of €7
each, convertible or exchangeable for new or existing common stock, representing an aggregate nominal value of
€124.30 million (including redemption premiums totaling approximately €8.89 million). The bonds, which originally
matured on April 1, 2009, carried interest at 4% a year (corresponding to a gross yield to maturity of 5.31%, including the
redemption premium). Each bond could originally be converted into one Atari share. This conversion ratio was increased
to 1.02 shares in December 2004 to take into account the allocation of free stock warrants on that date. The Company
has the option of calling the bonds if, prior to their maturity, the price of Atari common stock rises above a pre-defined
level. A prospectus was published in connection with the bond issue and was approved by the COB on
November 6, 2003 under No. 03-971.
Pursuant to the application of IAS 32 and IAS 39, the effective interest rate was 11.94%.
At their meeting of September 29, 2006, the OCEANE 2003-2009 bondholders amended the terms and conditions of the
bond indenture as follows:
- the bonds' maturity was extended from April 1, 2009 to April 1, 2020;
- after April 1, 2009, the OCEANE bondholders would no longer be able to convert their bonds into new Atari shares
or exchange them for existing shares;
- the nominal interest rate was reduced from 4% to 0.1%;
- the acceleration clause (2.5.10) of the bond indenture was deleted.
The conversion and/or exchange ratio was adjusted to 2.091 shares per OCEANE 2003-2009 bond following the rights
issue of January 2007, then to 2.401 shares per OCEANE 2003-2009 bond following the distribution of free stock
warrants to all shareholders.
Between February 12 and March 9, 2007, the Company ran a simplified public offer – whose terms and conditions were
described in a circular approved by the AMF on February 2, 2007 under notice no. 207CO246 – to exchange each
OCEANE 2020 bond tendered for 32 new Company shares. On March 16, 2007, the AMF issued notice no. 207C0515
reporting that 16.403.083 OCEANE 2020 bonds, or 99.5% of those outstanding, had been tendered to the offer.
On March 31, 2008, the conversion and/or exchange ratio was adjusted to 0.024 shares for each OCEANE 2020 bond to
reflect the reverse stock split.
Lastly, following the issue of the ORANE convertible bonds with stock warrants attached on December 9, 2008 (see
Note 1 – Significant events of the year), the ratio was further adjusted to 0.02416 shares per OCEANE 2011 bond in
February 2009 in order to take account of the issuance of pre-emptive subscription rights in connection with these
ORANE-BSA bonds.
As of March 31, 2009 and 2008, there were a total of 84.406 OCEANE 2020 bonds still outstanding, which could be
converted or exchanged for 2.039 Atari shares, with none of said bonds held by the Company. The OCEANE 2020
bonds not tendered under the offer are redeemable in full on April 1, 2020 for €7.539 each and carry interest at 0.1%.
BANC OF AMERICA (BOA) CREDIT FACILITY
The Company and its main European subsidiaries entered into a master agreement with Banc of America on
April 21, 2006 (based on an agreement on terms signed on March 28, 2006) aimed at refinancing all the short- and
medium-term debt of the Company and its subsidiaries (excluding Atari Inc.), and to which eight amendments have been
made. The seventh and eight amendments to the agreement were signed in the fourth quarter of 2008-2009
(February 27, 2009 and March 31, 2009, respectively) for the purposes of (i) extending the facility‟s expiration date to
December 31, 2009 and (ii) increasing the total amount of the facility from €46.9 million to €61.8 million. The Company is
currently in the process of negotiating with Banc of America to extend the maturity of this facility to July 2010.
The credit facility includes specific covenants based on the Group‟s compliance with financial ratios pertaining to revenue
aggregates, EBIT and operating cash flow. As of March 31, 2008, Banc of America waived its rights in the event of a
failure to meet the financial ratios and new covenants were scheduled to be negotiated for subsequent quarters. As of