ann out: gxy reaches agreement with bond hold, page-2

Highlights
? Galaxy restructures convertible bonds under agreement with bondholders
? Galaxy has the right to pre-pay bonds on basis of half cash/half shares plus options, on same basis as
current Entitlement Offer, until 19 November 2013
? Alleviates the need for the Company to repay bondholders in cash in November 2013
? Closing date of Entitlement Offer extended to 31 July 2013

Under the agreement, Galaxy has the ability to pre-pay principal and accrued interest outstanding to Bondholders in cash, and issue pro-rata shares and 1.5 options for each share on the same basis as the current Entitlement Offer in whole or part at any time until 19 November 2013. This repayment ability replaces the Bondholders’ existing put option right, which (if exercised) would otherwise require the Company to redeem all or some bonds on 19 November 2013.
As at 19 November 2013, to the extent there is any principal and accrued interest outstanding, the Bondholders will have the option to either (in part or all):
? Continue to hold the bonds until the maturity date of 19 November 2015 with a 2% increase in the coupon rate from 8% to 10% coupon per annum (no other variation in terms); or
? Convert the remaining bonds into shares and receive 1.5 options per share on the same terms as the current Entitlement Offer based on the outstanding principal plus accrued interest of the bonds.
Galaxy has undertaken that should the funds raised under the Entitlement Offer as at settlement of the Entitlement Offer exceed:
(i) A$35,000,000, the Issuer must make a repayment of A$5,125,000 to the Bondholders; or (ii) A$40,000,000, the Issuer must make a repayment of A$10,250,000 to the Bondholders.
In the event that A$10.25 million is paid to Bondholders, there would be a conversion of A$10.25 million into equity of Galaxy. This will result in a reduction in the Company’s liability in regards to the outstanding convertible bonds by A$20.5 million to A$41 million.
Galaxy interim Managing Director Anthony Tse said: “We are very pleased to have reached an agreement with our major bondholders and are grateful for their ongoing support. The agreement with our bondholders alleviates the cash needs for the original redemption due November 2013, which the Company understands has been a primary concern of investors to date, and represents a big step in the restructuring of our balance sheet.”
The current Entitlement Offer is a one (1) for one (1) pro-rata Offer of up to 584,355,501 new fully paid ordinary shares (“New Shares”) at an offer price of A$0.08 per New Share. Applicants will also receive three (3) free attaching New Options for every two (2) New Shares subscribed.
The closing date for eligible shareholders to participate in the Entitlement Offer is 07:00pm AEST on 31 July 2013. Shareholders are reminded that they are able to apply for and pay for their entitlements (and any additional securities applied for) via BPay (without the need to mail the Entitlement Offer Application Form) and shareholders should refer to their personalised instructions on their Application Form. If Shareholders have any queries about applying for their entitlement in the Entitlement Offer, they should contact the Company Secretary, Andrew Meloncelli, on +61 8 9215 1700.


Let's pick this apart and see how many gazillion shares that involves ?