Denne melding til obligasjonseieme er kun utarbeidet på engelsk. For informasjon vennligst kontakt Norsk Tillitsmann ASA. To the bondholders in: ISIN: NO 0010637457 25 per cent Emerging Europe Land Development AS Callable NO 0010671589 Open Bond Issue 2012/2014 NO 0010683600 Oslo, 21 November 2013 Summons to Bondholders Meeting - Change of debtor, restructuring and refinancing of the Group 1. INTRODUCTION Norsk Tillitsmann ASA is appointed as Bond Trustee for the above mentioned Bond Issue. Terms defined in the Bond Agreement shall have the same meaning when used herein. The information in this summons regarding the Issuer and market conditions are provided by the Issuer, and the Bond Trustee expressly disclaims all liability whatsoever related to such information. 2. BACKGROUND INFORMATION The Issuer is contemplating a restructuring of its business which entails a de-merger of the Issuer, a transfer of the debtor position under the Bond Issue from the Issuer to Turn ini AS (the "New Issuer") and a subsequent conversion of the Bond Issue to preferred shares in the New Issuer. 2.1 Restructuring of the Issuer and change of debitor Currently the Issuer owns several property projects in Eastern Europe through various subsidiaries. Of the property projects, only the commercial shopping center TC Lumini (the "Lumini Project") in Croatia has reached a phase where it has started to generate a certain cash flow for the Issuer. The remaining property projects (the "Development Projects") are still in an early development and planning phase. PO Box 1470 Vika, N-0116 Oslo Haakon VIIs gate 1, Oslo Switchboard: +47 22 87 94 00 Fax: +47 22 87 9410 www.trustee.no
Since the Lumini Project is developed into a commercial project with a substantially different time horizon and focus than the Development Projects, the Issuer contemplates to separate the Lumini Project from the Development Projects through a de-merger. The Lumini Project will be de-merged into the New Issuer. After the demerger, the Issuer's remaining assets will be the Development Projects, while the New Issuer will hold all assets and liabilities related to the Lumini Project. By separating the Lumini Project from the Development Projects, the Group establishes a beneficial division of the Issuer with respect to timing and focus. The Issuer will then have a longer time horizon than the New Issuer and will be able to focus on long term projects. The New Issuer will be able to focus all its energy and efforts on the Lumini Project and to maximize value and return for the stakeholders in that company. After the de-merger of the Issuer, the Issuer will not be able to service any debt. Consequently the restructuring proposal includes a proposal to transfer the debtor position under the Bond Issue to the New Issuer with subsequent conversion of the Bond Issue to preferred shares in the New Issuer. The de-merger will allow the Issuer and the New Issuer to follow separate paths for developing their respective property projects. Together with the proposed refinancing it also ensures a solid financial base for both companies. The completion of the de-merger is subject to approval of the general meeting of the Issuer. The general meeting of the Issuer will be held on 5 December 2013 after the Bondholders' Meeting has been held. 2.2 Conversion of the Second Priority Loan The Bond Issue amounts to approximately NOK 163 million when accrued interest is included and matures on 3 March 2014. The Issuer is not capable of repaying the amount due under the Bond Issue which implies that a refinancing of the loan is necessary to ensure that the Issuer can continue its business and further development of the Lumini Project. The grand opening of the Lumini Project is fast approaching and the Issuer needs to address the maturity and principal of the Bond Issue. The Issuer has for a long time been in discussions with numerous banks to try and refinance its existing bond debt but the attempts have been to no avail. Consequently the need for a refinancing of the Bond Issue is necessary. The Issuer's current debt burden is too heavy and needs to be managed so that the Issuer is able to operate its business until and after the grand opening of the Lumini Project. As a consequence of the above, the Issuer proposes that the Bond Issue together with accrued interest up until and including 5 December 2013 is converted to preferred shares (the "Preferred Shares"). The conversion of the Bond Issue will be completed after the de-merger, meaning that the Preferred Shares will be issued by the New Issuer. After issuance of the Preferred Shares has been completed, the share capital of the New Issuer will consist of 146,073,156 ordinary shares and up to 162,820,736 Preferred Shares. The conversion price for converting Bonds and accrued interest to Preferred Shares is NOK 1 and the number of Preferred Shares to be issued depend on whether or not parts of the accrued interest on the Bonds will be paid by the Issuer PO Box 1470 Vika, N-0116 Oslo j Haakon VIIs gate i, Oslo Switchboard: +47 22 87 94 00 Fax: +47 22 87 94 10 www.trustee.no
prior to conversion. All shares in the New Issuer will have equal voting rights. The Preferred Shares will have a preferred right ahead of ordinary shares to distributions from the New Issuer. Reference is made to the attached draft articles of association for the New Issuer for the full preferred rights attaching to the Preferred Shares. By converting the Bond Issue and accrued interest to preferred shares in the New Issuer after the de-merger, the Bondholders receive shares in a cash generating business. Furthermore the New Issuer's debt burden is significantly reduced and the New Issuer will therefore re-emerge as a healthy company with sustainable debt. Furthermore the articles of association of the New Issuer will be amended so that future pledges over the Lumini Project will have to be approved by the general meeting of the New Issuer. The Bondholders will as a consequence of the conversion of the Bond Issue and accrued interest to Preferred Shares release the current security in place for the Bonds. To compensate the Bondholders for the release of the security related to the Kupinec project, the Issuer proposes to resolve to issue warrants to the Bondholders which entitles the Bondholders to subscribe for shares in the Issuer (the "Warrants"). The value of the Warrants will correspond to thte value of the Kupinec Project. The terms of the Warrants are set out in the draft resolution attached to this summons. The conversion of the Bond Issue and accrued interest to Preferred Shares will be resolved at an extraordinary general meeting in the New Issuer to be held on 5 December 2013 after the Bondholders' Meeting has been held. The extraordinary general meeting will also resolve the de-merger where the New Issuer is the acquiring company. The Issuer will hold its extraordinary general meeting to approve the demerger and issue of the Warrants at the same time. 2.3 New issue of bonds under the 15 per cent Emerging Europe Land Development AS Callable Bond Issue 2013/2014 (the "First Priority Bond Issue") In addition to proposing a debtor change and subsequent conversion of the Bond Issue, the Issuer is proposing to raise additional funds of minimum NOK 75 million and maximum NOK 96 million by issuing new bonds under the First Priority Bond Issue. Reference is made to a separate summons prepared for the First Priority Bond Issue for further information. For more detailed information, please contact: Eirik Forthun CEO EELD AS Telephone: + 47 90639000 Email: ef@eeld.no Robert Hagen CFO EELD AS PO Box 1470 Vika, N-0116 Oslo Haakon VIIs gate 1, Oslo Switchboard: +47 22 87 94 00 Fax: +47 22 87 9410 www.trustee.no
Telephone: +47 99798833 Email: Robert.Hagen@eeld.no Christian Meland Bang Associate at Advokatfirmaet Wiersholm AS Telephone: +47 92205049 E-mail: cmba@wiersholm.no 3. THE PROPOSAL The Issuer requests that the Bondholders consent to (i) the proposed de-merger of the Issuer, (ii) change of the debtor position under the Bond Issue from the Issuer to the New Issuer and subsequent conversion of the Bond Issue and accrued interest to the Preferred Shares, (iii) granting Norsk Tillitsmann ASA a power of attorney to subscribe for the Preferred Shares and the Warrants on behalf of the Bondholders and (iv) grant a power of attorney to Norsk Tillitsmann ASA to release the guarantors in the Bond Issue from their liability as guarantors after the issue of the Preferred Shares has been carried out. As part of the transfer of the debtor position under the Bond Issue from the Issuer to the New Issuer, the Issuer requests that the Bondholders consent to release the Issuer from any joint and vicarious liability arising under the Bond Issue. Finally the Issuer requests the Bondholders to consent to the Issuer or the New Issuer being entitled to repay up to NOK 20 million of accrued interest prior to converting the Bonds to the Preferred Shares. Such repayment will be carried out pro rata between the Bonds. 4. USE OF PROCEEDS The conversion of the Bond Issue to the Preferred Shares does not generate any proceeds. 5. NO COMPENSATION The proposed de-merger of the Issuer and subsequent refinancing will benefit the Bondholders as well as the Group, and the Issuer is therefore of the view that under the current circumstances it is not appropriate to offer any remuneration to the Bondholders. The Bondholders may however receive some payment of interest prior to the conversion depending on the proceeds from the issue of the new bonds under the First Priority Bond Issue. 6. ISSUER'S EVALUATION OF THE PROPOSAL It is the clear opinion of the Issuer that the proposed conversion of the Bond Issue is both necessary and beneficial for the Issuer's stakeholders. Together with the proposed issue of new bonds under the First Priority Bond Issue the Proposal creates a sustainable solution for the Group's future operation.the conversion of the Bond Issue is required to transform the New Issuer into a sustainable company as the current debt burden is not sustainable for the Issuer and will not be sustainable for the New Issuer. PO Box 1470 Vika, N-0116 Oslo ] Haakon VIIs gate i, Oslo Switchboard: +47 22 87 94 00 Fax: +47 22 87 9410 www.trustee.no
7. SUMMONS FOR BONDHOLDERS MEETING In accordance with the relevant provisions under the Bond Agreement, the Issuer has requested the Bond Trustee to convene a Bondholders' meeting in respect of the Bond Loan to obtain the necessary consents and approvals to enable the Issuer to complete and implement the de-merger and to make the relevant changes to the Bond Agreement subject to the terms and conditions set out in this Summons. All Bonds in the Bond Issue will vote in the same meeting and the poll will be held as one poll for all three ISIN numbers. The request is put forward to the Bondholders without further evaluation or recommendations from the Bond Trustee. The Bondholders must independently evaluate whether the proposed changes are acceptable. Bondholders meeting: Bondholders are hereby summoned to a Bondholders meeting: Time: Place: 5 December 2013 at 12:00 hours (Oslo time), The premises of Norsk Tillitsmann ASA, Haakon VIIs gt 1, 0161 Oslo - 5th floor Agenda: 1. Approval of the summons. 2. Approval of the agenda. 3. Election of two persons to co-sign the minutes together with the chairman. 4. Voting over the Proposal: It is proposed that the Bondholders meeting resolve the following: 1. The Proposal (as defined in the summons to this Bondholders' Meeting) is approved by the Bondholders' Meeting. 2. The Bond Trustee is given power of attorney for all matters related to documenting the decisions made by this Bondholders meeting as well as necessary completion work, including making amendments to the Bond Agreement. To approve the above resolution, Bondholders representing at least 2/3 of the Bonds represented in person or by proxy at the meeting must vote in favour of the resolution. In order to have a quorum, at least 1/2 of the voting Bonds must be represented at the meeting. If the proposal is not adopted, the Bond Agreement will remain unchanged. Please find attached a Bondholder s Form from the Securities Depository (VPS), indicating your bondholding at the printing date. The Bondholder s Form will serve as proof of ownership of the Bonds and of the voting rights at the bondholders meeting. (If the bonds are held in custody - i.e. the owner is not registered directly in the VPS - PO Box 1470 Vika, N-0116 Oslo Haakon VIIs gate i, Oslo Switchboard: +47 22 87 94 00 Fax: +47 22 87 9410 www.tmstee.no
the custodian must confirm; (i) the owner of the bonds, (ii) the aggregate nominal amount of the bonds and (iii) the account number in VPS on which the bonds are registered.) The individual bondholder may authorise Norsk Tillitsmann to vote on its behalf, in which case the Bondholder s Form also serves as a proxy. A duly signed Bondholder s Form, authorising Norsk Tillitsmann to vote, must then be returned to Norsk Tillitsmann in due time before the meeting is scheduled (by scanned e-mail, telefax or post - please see the first page of this letter for further details). In the event that Bonds have been transferred to a new owner after the Bondholder s Form was made, the new Bondholder must bring to the Bondholders meeting or enclose with the proxy, as the case may be, evidence which the Bond Trustee accepts as sufficient proof of the ownership of the Bonds. For practical purposes, we request those who intend to attend the bondholders meeting, either in person or by proxy other than to Norsk Tillitsmann, to notify Norsk Tillitsmann by telephone or by e-mail (at set out at the first page of this letter) within 16:00 hours (4 pm) (Oslo time) the Banking Day before the meeting takes place. Yours sincerely Norsk Tillitsmann ASA (on behalf of) Karianne Bruland Enclosed: Bondholder s Form Draft articles of association for Lumini AS (the New Issuer) Draft resolution for issue of warrants PO Box 1470 Vika, N-0116 Oslo Haakon VIIs gate i, Oslo Switchboard: +47 22 87 94 00 Fax: +47 22 87 9410 www.trustee.no
UTKAST VEDTEKTER FOR LUMINI AS (Vedtatt [ ], sist endret [ ]) Selskapets foretaksnavn er Lumini AS. Selskapets forretningskontor er i Oslo kommune. 1 2 3 Selskapets virksomhet består i å eie aksjer i selskaper som direkte eller gjennom eierskap i andre selskaper eier og utvikler eiendomsprosjekter, samt virksomhet som naturlig hører sammen med dette. 4 Selskapets aksjekapital er NOK [ ] fordelt på [ ] preferanseaksjer1 og 146.073.156 ordinære aksjer. Hver aksje er pålydende NOK [0,006]. Aksjene skal være registrert i et verdipapirregister. Preferanseaksjene og de ordinære aksjene har like stemmerettigheter i selskapet. Preferanseaksjene har følgende særrettigheter: Rett til årlig utbytte på 12,5 % av pålydende verdi fra og med den dato hvor kapitalforhøyelsen i forbindelse med utstedelsen av preferanseaksjene registreres i Foretaksregisteret. Retten til utbytte forutsetter at lovgivningens vilkår for utdeling av utbytte er oppfylt og at selskapets likviditetssituasjon, hensyntatt drifts- og vedlikeholdsutgifter, finansieringskostnader og godkjente investeringer, etter styrets rimelige skjønn muliggjør utdeling av utbytte. Preferanseaksjene har ikke rett til utbytte utover dette. Dersom selskapet ikke er i stand til å betale preferanseutbytte (12,5 %) et år overføres utbytteretten til senere år. Det påløper ikke rente på utsatt preferanseutbytte. Ordinære aksjer kan bare få utbytte dersom preferanseaksjene har fått utbetalt fullt utbytte (inkl. akkumulert utbytterett fra tidligere år). Selskapet kan når som helst innløse alle eller noen av preferanseaksjene til en kurs som tilsvarer tegningskursen for hver aksje pluss eventuelt akkumulert, ikke-utbetalt utbytte. Ved delvis innløsning skal innløsningen så langt som mulig skje forholdsmessig. Når generalforsamlingen behandler forslag om innløsning av preferanseaksjene skal preferanseaksjene være inhabile og skal ikke ha rett til å avgi stemme eller telle med i representert kapital. Ved salg eller likvidasjon av selskapet skal preferanseaksjene ha tilbakebetalt tegningskursen pluss eventuelt akkumulert, ikke-utbetalt utbytte før de ordinære aksjene mottar noe. Utover tilbakebetaling av tegningskurs pluss eventuelt akkumulert, ikke-utbetalt utbytte skal ikke preferanseaksjene ha rett til å delta i noen utdeling. i Antall preferanseaksjer avhenger av hvor mye renter som tilbakebetales på andreprioritetslånet før konvertering. Dersom det ikke tilbakebetales renter før konvertering vil antall preferanseaksjer være det samme som beløpet som konverteres, altså ca. 165 millioner. 1
UTKAST Med unntak for preferanseaksjenes særrettigheter som beskrevet ovenfor er preferanseaksjene og de ordinære aksjene likestilte i alle henseender. Selskapets firma tegnes av to styremedlemmer i fellesskap. Erverv av aksjer er ikke betinget av selskapets samtykke. Aksjonærer har ikke forkjøpsrett til aksjer som skifter eier. 5 6 7 8 Pantsettelse av selskapets faste eiendommer må godkjennes av generalforsamlingen med flertall som for vedtektsendring. 9 Dokumenter som skal behandles på generalforsamlingen kan gjøres tilgjengelige på selskapets internettsider. Det samme gjelder dokumenter som etter lov skal inntas i eller vedlegges innkallingen til generalforsamlingen. Dersom dokumentene tilgjengliggjøres på denne måten skal ikke lovens krav om utsendelse til aksjeeierne få anvendelse. En aksjeeier kan likevel kreve å få tilsendt dokumenter som gjelder saker som skal behandles på generalforsamlingen. 10 Selskapet kan bruke elektronisk kommunikasjon når det skal gi meldinger, varsler, informasjon, dokumenter, underretninger og lignende etter aksjeloven til aksjonærene. 2
UTKAST TIL VEDTAK OM UTSTEDELSE AV TEGNINGSRETTER Emerging Europe Land Development AS (i) (ii) (iii) Etter aksjeloven 11-12 utstedes det [xx] frittstående tegningsretter. Tegningsrettene utstedes til Norsk Tillitsmann ASA som tegner tegningsrettene på vegne av obligasjonseierne i Selskapets obligasjonslån med ISIN NO 0010637457, NO 0010671589 og NO 0010683600. Hver tegningsrett gir rett til utstedelse av én aksje pålydende NOK [xx] i selskapet. (iv) Aksjeeiernes fortrinnsrett etter aksjeloven 11-13, jf. 10-4 fravikes. (v) (vi) Tegningsrettene skal tegnes i et eget tegningsdokument. Fristen for tegning av tegningsrettene er [31. januar 2014]. Det skai ikke ytes vederlag for tegningsrettene. (vi i) Prisen for aksjene ved utøvelse av tegningsrettene skal være NOK [xx] [Kommentar: Prisen skal tilsvare aksjenes pålydende etter fisjon], (viii) Retten til å kreve utstedt aksjer kan først gjøres gjeldende etter 30. april 2018. Dersom (a) Lumini AS (org. nr. 912 049 442) begjæres konkurs, (b) det i forhold til Lumini AS erklæres mislighold av gjeld på mer enn NOK 10 millioner eller (c) kjøpesenteret Lumini selges og salgsprovenyet ikke er tilstrekkelig til å innløse alle preferanseaksjene i Lumini AS kan tegningsrettene utøves umiddelbart. Den enkelte tegner kan bare kreve utstedt aksjer for et beløp som tilsvarer det innehaveren ikke har fått tilbakebetalt på sine preferanseaksjer i Lumini AS på det tidspunktet kravet fremsettes (herunder akkumulert utbytterett). Krav om utstedelse av aksjer må fremsettes senest fem år etter generalforsamlingens beslutning. (ix) Det er et vilkår for utøvelse av tegningsretten at innehaveren eier [1,13] preferanseaksjer i Lumini AS for hver tegningsrett som utøves. Antallet tegningsretter som kan utøves rundes ned til nærmeste heie tegningsrett. Hvis retten til utøvelse utløses av delvis innløsning av preferanseaksjene etter pkt. (viii) (c) er det bare ikke innløste preferanseaksjer som teller med i beregningen av hvor mange tegningsretter som kan utøves. (x) (xi) Tegningsrettene kan ikke overdras eller på annen måte gå over til ny eier uten at de overdras sammen med preferanseaksjer i Lumini AS. Ved forhøyelse eller nedsettelse av aksjekapitalen, spleis av aksjene, ny beslutning om utstedelse av tegningsretter eller ved oppløsning, fusjon, fisjon eller omdanning skai tegningsrettene justeres etter styrets nærmere beslutning i samsvar med anerkjente prinsipper for slike justeringer. De nye aksjene gir rett til utbytte fra det regnskapsåret de blir utstedt. De nye aksjene gir forøvrig fulle rettigheter fra det tidspunkt aksjene er registrert i Verdipapirsentralen.