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AusGroup proposes debt-to-equity conversion on existing notes, shareholder loan

OILFIELD services firm AusGroup is proposing a debt-to-equity conversion for its S$110 million notes due 2018, and on a shareholder loan from Ezion Holdings.

Under the proposal, noteholders would exchange the existing notes - which come with an interest rate of 7.95 per cent - for new shares in the group, it said in an announcement to the Singapore Exchange (SGX) on Sunday night.

In addition, the group is also proposing to undertake a capitalisation of a loan from Ezion through the issuance of new shares.

The proposed issue price of each new share is S$0.058, representing a premium of about 6.62 per cent above the volume-weighted average price (VWAP) of S$0.054 from the last trading day, May 18, and a premium of approximately 6.03 per cent above the VWAP of S$0.0547 for trades completed over the 30 market days before the announcement. The new shares will be traded on SGX in a minimum board lot size of 100 new shares.

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The exchange offer will commence at 9am on Monday and expire at 5pm on June 8; the settlement date is slated for June 30.

AusGroup intends to hold an extraordinary general meeting to seek approval from shareholders on both proposals. Several major shareholders, including Ezion, have undertaken to vote in favour of the note conversion.