The complex restructuring terms, negotiated over the past 10 months following the boardroom coup led by Sir Ian MacGregor, will eradicate virtually all the company's dollars 72.6m ( pounds 38m) of loans and accrued interest.
Eric Kohn, who became chief executive after the coup, said the conclusion of the deal meant that 'we have now met every promise made to shareholders during last year's proxy fight'.
There are 10 key points to the restructuring agreement struck with the lenders, mainly US institutions which include Municipal of New York, John Hancock and Shield Asset management.
Chiefly, dollars 37m in new equity will be issued and dollars 72.6m of loans and accrued interest wiped out. The loans will be exchanged for dollars 28m cash, 19 per cent of the enlarged share capital of Holmes, warrants to subscribe for 5 per cent of the enlarged capital and reimbursement of dollars 2.2m costs.
Holmes also plans equity placings in Britain, the US and continental Europe and an open offer to qualifying shareholders of 25.55 million common shares.
The placing price is 62.5p per share, equivalent to 2.5p per share prior to one-for-25 share consolidation included in the restructuring terms. Sir Ian has bought 415,000 new shares.
In addition to the restructuring, Holmes proposes to amend some of its by-laws. The principal change involves rules for requisitioning special meetings, which were a bone of contention during last year's proxy battle.Reuse content