Atari 2011 Annual Report Download - page 72

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
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effect of 0.2% on the Company’s capital as of March 31, 2011. As of July 2, 2011, these bonds will no longer have
potential dilutive impact on the company share capital as they will be reimbursed on July 1, 2011.
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
€124.3 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.
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
tendered OCEANE 2020 bond 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. This ratio was further adjusted in February 2009 to 0.02416 to reflect the issue of pre-
emptive subscription rights in connection with the ORANE-BSA issue in December 2008.
Since April 1, 2009, the OCEANE bondholders are no longer able to convert their bonds into new Atari shares or
exchange them for existing shares, the OCEANE have no dilutive impact since that date. As of March 31, 2011 a total of
82,906 OCEANE 2020 bonds were still outstanding.
BLUEBAY 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.).
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 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
end-March 2009, these negotiations had not been concluded, and accordingly, the Group had no covenants to observe
for this credit facility.
The Company, Atari Europe SAS and The BlueBay Value Recovery (Master) Fund Limited met on December 10, 2009
and signed amendment 9 to the loan agreement of April 21, 2006, extending the maturity date of the senior credit facility
to December 31, 2010.
The Company, Atari Europe SAS and The BlueBay Value Recovery (Master) Fund Limited met on October 1, 2010 and
signed amendment 11 to the loan agreement of April 21, 2006, extending the maturity date of the senior credit facility to
June 30, 2011. As per addendum 12 signed on June 30, 2011, the Company and BlueBay have agreed the extension of
a credit facility of €49 million to December 30, 2011.
At March 31, 2011, a total of € 42.4 million had been drawn down under the credit facility in the form of cash or standby
loans. Drawdowns in cash carry interest at the 3-month Euribor +850 basis points and standby loans carry interest at
3%.
Drawdowns under the BlueBay credit facility can be analyzed as follows at March 31, 2011 and 2010: