20th October 2008 Settlement of Convertible Note Hyro Limited ASX : HYO Hyro Limited (ASX : HYO) advises that it has executed a binding Settlement Agreement with the Provisional Liquidators of Lehman Brothers Commercial Corporation Asia Limited (“LBCCAL”), a subsidiary of Lehman Brothers Inc., with respect to a $20 million convertible note issued by the Company and held by LBCCAL.
Under the terms of the Settlement Agreement the company will be released from all current, accrued and future obligations with respect to the Convertible Note, including:
1. The repayment of the Convertible Note of $20 million;
2. Accrued interest of approximately $1.5 million;
3. Future interest of approximately $2.6 million, payable in the period to maturity of the Convertible Note in May 2010;
4. The Fixed and Floating Charge over the company. In return for these agreed terms, Hyro will provide:
5. Cash settlement of $1.2 million dollars;
6. An initial allocation of 80,000,000 fully paid ordinary shares in Hyro Limited;
7. A second allocation of 27,000,000 fully paid ordinary shares in Hyro Limited to be issued following receipt of shareholder approval.
The Fixed and Floating Charge will be removed immediately upon the issue of the initial allocation of 80,000,000 fully paid ordinary shares and the payment of the total cash component of $1.2m.
Based on the current issued capital of the business, the final holding issued to Lehman Brothers is expected to represent approximately 17% of the post dilution issued capital of the company. This Settlement Agreement supersedes all previous negotiations with Lehman Brothers.
Under the terms of the previous deal, which was reached prior to the collapse of Lehman Brothers and was subject to shareholder approval, Lehman Brothers would have received 38% of the equity in the company, A$3 million in cash and Board representation. “This is a significant milestone for the company” said Hyro Chief Executive Mr. Bill Votsaris.
“In these uncertain and volatile times we have been able to reach agreement which satisfies the needs of the Provisional Liquidators and serves the interests of our shareholders.”
“The company has faced a number of questions over recent weeks regarding the Lehman Brothers collapse and the implications for Hyro’s business” Mr. Votsaris said. “This Settlement Agreement resolves these questions”. “To have been able to reduce the company’s debt profile by $20 million under the terms described, and to have saved more than $4.1 million in interest until the time the convertible note matures, should be seen as bringing significant value to our shareholders” Mr Votsaris said.
“This brings the company’s net bank borrowings, including cash deposits, to less than $1 million, including all leasing facilities.”
For further information call: Bill Votsaris Chief Executive Officer Hyro Limited (03) 9673 7300 Leanne Ralph Company Secretary Hyro Limited (02) 9215 4222 About Hyro Hyro Limited (ASX:HYO) is a Digital Services company which provides services to support the online marketing, electronic commerce and other digital channel based activities of major corporations and government agencies throughout Australia, New Zealand and Asia. Hyro is focused purely on Digital Services across Internet, mobile, and interactive TV channels; from the user’s screen to the back-end systems. Hyro’s end-to-end Digital Services offering includes award winning creative, online advertising campaigns, mobile services such as mobile TV and m-sites, sophisticated e-commerce and e-government implementations, technology development, integration projects and ongoing managed services. Hyro's enterprise-wide approach provides all necessary services for its clients to attract customers, interact with those customers, and which integrate the engagement with their existing IT infrastructure to deliver business outcomes. Hyro has over 500 employees in offices in Australia, New Zealand, Thailand, China and Hong Kong. Hyro is an IBM Premier Business Partner. For more information please go to www.hyro.com (main site) or www.hyrolimited.com (investor site).
HYO Price at posting:
1.5¢ Sentiment: LT Buy Disclosure: Held
