USB: Interim Management Statement – EGM on 7/12 for issue of rights and Convertible Bond
9/11/2009 9:42
USB BANK PLC would like to inform the investing public that at the meeting held on 6.11.2009, the Board of Directors approved the Interim Management Statement for the period from July 1, 2009 to November 5, 2009, which has been prepared pursuant to article 11 of the Transparency Requirements Law 2007.
At the same meeting and further to its decision dated 9/9/2009 for the issue of Rights and Convertible Bond to strengthen the Company’s capital base, the Board of Directors decided to hold an Extraordinary General Meeting on 7/12/2009 at 4.00 pm at 83 Griva Digeni Avenue, 6th floor, to examine and approve the following special resolutions.
Special Resolution 1
The Board of Directors is authorized to proceed with the issue and allocation of shares of nominal value €0.57 each at the price of €0.68 per share, which are offered on a pro rata basis to all shareholders registered in the registry of USB BANK PLC on the record date. The record date will be determined on the basis of the CSE timetables and will depend on the date of approval of the Prospectus by the SEC.
These shares are offered to the beneficiaries in the form of Rights to the ratio of 1 to1, that is, 1 Right for every existing share. For every 2 Rights allocated, each shareholder is entitled to purchase 1 new share against €0.68. The payment of the price by the shareholders who exercise the Rights for the acquisition of shares is carried out at the acceptance of the offer. In case that after the exercise of Rights by the shareholders, there are balances and/or unexercised Rights, they will be returned to the Board of Directors, which will dispose them at its sole discretion and under the same terms offered to the existing shareholders with an exercise price that will not be lower than €0.68 per share.
Pursuant to the provisions of article 60B(5) of the Companies’ Law Chapter 113 and taking into account the Articles of Association, the existing shareholders disclaim their preference rights in relation to the aforementioned allocation of indisposed shares after the expiry of Rights.
The Board of Directors is authorized to cooperate with the external consultants of the Company in the submission of an application to the CSE and the preparation of the relevant Prospectus for the issue, allocation and listing of the Rights and shares that will emerge, pursuant to the laws and the regulations.
Special Resolution 2
The Board of Directors is authorized to proceed with the issue and listing of Convertible Bonds of total nominal value €9,984,580 with the right for expansion of up to €14,976,869 under the following terms, which are offered on a pro rata basis to all shareholders registered on the record date. The record date will be determined on the basis of the CSE timetables and will depend on the date of approval of the Prospectus by the SEC.
The Convertible Bonds will be of nominal value €1 and will be issued to the ratio of €0.22 of Convertible Bond value with a right for expansion at the sole discretion of the Board of Directors to €0.33 per share held by the shareholders on the record date.
If the total issue of the Convertible Bonds is not covered by the beneficiaries, the Board of Directors is authorized to dispose the Convertible Bonds at its sole discretion.
The Convertible Bonds will be of 10-year duration and the beneficiaries may be registered paying fully the sum that corresponds to their application.
The annual interest rate for the first five years from the date of issue is stable 7.25% on the nominal value and for the next 5 years it will be stable 8.75% on the nominal value.
The interest rate period is six-month and the interest will be paid cash at the end of each period ending June 30 and December 31 of each year. The first interest payment will be paid on June 30, 2010.
The Convertible Bonds may be converted into ordinary shares during the periods of conversion. The periods of conversion are March 15-30 and September 15-30, 2012, March 15-30 and September 15-30, 2013 and March 15-30 and September 15-30, 2014. The conversion price has been set at €0.90 per Convertible Bond of nominal value €1.
The Company has the right for an early acquisition of the Convertible Bond as a whole and not part of it, cash, in its nominal value together with any earned interests on June 30, 2015 or any interest payment date that follows, after the Central Bank of Cyprus approval.
The Convertible Bonds that will be acquired by the Company will be cancelled and the Company ceases to have any obligations in relation to this.
The Board of Directors is authorized to take all necessary measures for the offer and issue of Convertible Bonds, as well as the setting of all other issue terms.
In addition, the Board of Directors is authorized – if deemed necessary taking into account the prevailing conditions before the approval of the issue by the competent authorities – to change the issue terms of the Convertible Bonds as to the interest rate and to increase or decrease it by up to 1%, as well as to change the conversion price by up to 10%.
Pursuant to the provisions of article 60B(5) of the Companies’ Law Chapter 113 and taking into account the Articles of Association, the existing shareholders disclaim their preference rights in relation to the above issue of Convertible Bonds that will remain indisposed after the offer of the Convertible Bonds.
The Board of Directors is authorized to cooperate with the external consultants of the Company in the submission of an application to the CSE and the preparation of the relevant Prospectus for the issue, allocation and listing of the Convertible Bond and the shares that will emerge and will rank pari passu with the existing shares, pursuant to the relevant law and regulations.
The notification for the proxy document will be posted to the shareholders the soonest possible.
Interim Management Statement
The Interim Management Statement of USB Bank Ltd for the period from July 1, 2009 to November 5, 2009 has been prepared pursuant to the provisions of Article 11 of the Transparency Requirements Law 2007.
1. Description of facts
There were no significant facts affecting the Company’s financial statements during the period and there were no profits or losses from non-recurrent activities or activities that do not fall under the Company’s activities.
Despite the ongoing recession, the Bank maintained high liquidity levels and its priority is to strengthen its capital base to be protected against the possible risks.
At the meeting held on September 8, 2009, the Board of Directors decided to increase the bank’s capital via the increase in the share capital and the issue of a convertible bond of 10-year duration. Specifically, it was decided to increase the share capital via the issue of 45,384,453 Rights, that is, 1 Right for every issued ordinary share of nominal value €0.57, pursuant to the CSE Regulations. With this issue, up to €15 million will be absorbed. The new shares will rank pari passu with the existing shares. It was also decided to issue a convertible bond of 10-year duration of €10 million. The Board of Directors will be able to expand the sum of issue of the convertible bond up to €15 million.
The Rights and the right of participation in the issue of the convertible bonds will be offered to the existing shareholders of the Bank.
2. Economic condition
The Bank’s turnover showed an increase of 7% to €8.0 million compared to €7.5 million in July – September 2008.
The Bank’s primary target is to maintain its liquidity in order to safeguard growth. The mixed loans to deposit index remained at 71% on September 30, 2009, just like on June 30, 2009.
Despite the competitive environment and the economic slowdown, the Bank increased its customers’ deposits by 8% to €479.5 million compared to €445.9 million on June 30, 2009 and €437.8 on September 30, 2008. As a result of the increased deposits and the strong competition for the attraction of deposits in late 2008, the income from interests showed an increase of 22%.
The income from interests stood at €6.9 million for the quarter compared to €6.5 million in the corresponding period of 2008 (+7%).
The other income showed a slight decrease of 4%, while the staff cost, which is the largest part of operating expenses, stood at €2.3 million compared to €2.1 million in the corresponding quarter of 2008 (+7%). This increase is attributable to the enforcement of the union contract.
The Bank’s ongoing efforts to cut expenses restrained the other operating expenses, which remained the same as last year.
Due to the deterioration of the economic conditions, the provisions for depreciation in the value of loans increased by €262 thousand, while the loss for the quarter ended September 30, 2009 reached €819 thousand compared to a profit of €42 thousand in the corresponding period of 2008. As a result, the Bank’s profits for the nine months stood at €342 thousand compared to €2.4 million in the corresponding period of 2008.
At the same meeting and further to its decision dated 9/9/2009 for the issue of Rights and Convertible Bond to strengthen the Company’s capital base, the Board of Directors decided to hold an Extraordinary General Meeting on 7/12/2009 at 4.00 pm at 83 Griva Digeni Avenue, 6th floor, to examine and approve the following special resolutions.
Special Resolution 1
The Board of Directors is authorized to proceed with the issue and allocation of shares of nominal value €0.57 each at the price of €0.68 per share, which are offered on a pro rata basis to all shareholders registered in the registry of USB BANK PLC on the record date. The record date will be determined on the basis of the CSE timetables and will depend on the date of approval of the Prospectus by the SEC.
These shares are offered to the beneficiaries in the form of Rights to the ratio of 1 to1, that is, 1 Right for every existing share. For every 2 Rights allocated, each shareholder is entitled to purchase 1 new share against €0.68. The payment of the price by the shareholders who exercise the Rights for the acquisition of shares is carried out at the acceptance of the offer. In case that after the exercise of Rights by the shareholders, there are balances and/or unexercised Rights, they will be returned to the Board of Directors, which will dispose them at its sole discretion and under the same terms offered to the existing shareholders with an exercise price that will not be lower than €0.68 per share.
Pursuant to the provisions of article 60B(5) of the Companies’ Law Chapter 113 and taking into account the Articles of Association, the existing shareholders disclaim their preference rights in relation to the aforementioned allocation of indisposed shares after the expiry of Rights.
The Board of Directors is authorized to cooperate with the external consultants of the Company in the submission of an application to the CSE and the preparation of the relevant Prospectus for the issue, allocation and listing of the Rights and shares that will emerge, pursuant to the laws and the regulations.
Special Resolution 2
The Board of Directors is authorized to proceed with the issue and listing of Convertible Bonds of total nominal value €9,984,580 with the right for expansion of up to €14,976,869 under the following terms, which are offered on a pro rata basis to all shareholders registered on the record date. The record date will be determined on the basis of the CSE timetables and will depend on the date of approval of the Prospectus by the SEC.
The Convertible Bonds will be of nominal value €1 and will be issued to the ratio of €0.22 of Convertible Bond value with a right for expansion at the sole discretion of the Board of Directors to €0.33 per share held by the shareholders on the record date.
If the total issue of the Convertible Bonds is not covered by the beneficiaries, the Board of Directors is authorized to dispose the Convertible Bonds at its sole discretion.
The Convertible Bonds will be of 10-year duration and the beneficiaries may be registered paying fully the sum that corresponds to their application.
The annual interest rate for the first five years from the date of issue is stable 7.25% on the nominal value and for the next 5 years it will be stable 8.75% on the nominal value.
The interest rate period is six-month and the interest will be paid cash at the end of each period ending June 30 and December 31 of each year. The first interest payment will be paid on June 30, 2010.
The Convertible Bonds may be converted into ordinary shares during the periods of conversion. The periods of conversion are March 15-30 and September 15-30, 2012, March 15-30 and September 15-30, 2013 and March 15-30 and September 15-30, 2014. The conversion price has been set at €0.90 per Convertible Bond of nominal value €1.
The Company has the right for an early acquisition of the Convertible Bond as a whole and not part of it, cash, in its nominal value together with any earned interests on June 30, 2015 or any interest payment date that follows, after the Central Bank of Cyprus approval.
The Convertible Bonds that will be acquired by the Company will be cancelled and the Company ceases to have any obligations in relation to this.
The Board of Directors is authorized to take all necessary measures for the offer and issue of Convertible Bonds, as well as the setting of all other issue terms.
In addition, the Board of Directors is authorized – if deemed necessary taking into account the prevailing conditions before the approval of the issue by the competent authorities – to change the issue terms of the Convertible Bonds as to the interest rate and to increase or decrease it by up to 1%, as well as to change the conversion price by up to 10%.
Pursuant to the provisions of article 60B(5) of the Companies’ Law Chapter 113 and taking into account the Articles of Association, the existing shareholders disclaim their preference rights in relation to the above issue of Convertible Bonds that will remain indisposed after the offer of the Convertible Bonds.
The Board of Directors is authorized to cooperate with the external consultants of the Company in the submission of an application to the CSE and the preparation of the relevant Prospectus for the issue, allocation and listing of the Convertible Bond and the shares that will emerge and will rank pari passu with the existing shares, pursuant to the relevant law and regulations.
The notification for the proxy document will be posted to the shareholders the soonest possible.
Interim Management Statement
The Interim Management Statement of USB Bank Ltd for the period from July 1, 2009 to November 5, 2009 has been prepared pursuant to the provisions of Article 11 of the Transparency Requirements Law 2007.
1. Description of facts
There were no significant facts affecting the Company’s financial statements during the period and there were no profits or losses from non-recurrent activities or activities that do not fall under the Company’s activities.
Despite the ongoing recession, the Bank maintained high liquidity levels and its priority is to strengthen its capital base to be protected against the possible risks.
At the meeting held on September 8, 2009, the Board of Directors decided to increase the bank’s capital via the increase in the share capital and the issue of a convertible bond of 10-year duration. Specifically, it was decided to increase the share capital via the issue of 45,384,453 Rights, that is, 1 Right for every issued ordinary share of nominal value €0.57, pursuant to the CSE Regulations. With this issue, up to €15 million will be absorbed. The new shares will rank pari passu with the existing shares. It was also decided to issue a convertible bond of 10-year duration of €10 million. The Board of Directors will be able to expand the sum of issue of the convertible bond up to €15 million.
The Rights and the right of participation in the issue of the convertible bonds will be offered to the existing shareholders of the Bank.
2. Economic condition
The Bank’s turnover showed an increase of 7% to €8.0 million compared to €7.5 million in July – September 2008.
The Bank’s primary target is to maintain its liquidity in order to safeguard growth. The mixed loans to deposit index remained at 71% on September 30, 2009, just like on June 30, 2009.
Despite the competitive environment and the economic slowdown, the Bank increased its customers’ deposits by 8% to €479.5 million compared to €445.9 million on June 30, 2009 and €437.8 on September 30, 2008. As a result of the increased deposits and the strong competition for the attraction of deposits in late 2008, the income from interests showed an increase of 22%.
The income from interests stood at €6.9 million for the quarter compared to €6.5 million in the corresponding period of 2008 (+7%).
The other income showed a slight decrease of 4%, while the staff cost, which is the largest part of operating expenses, stood at €2.3 million compared to €2.1 million in the corresponding quarter of 2008 (+7%). This increase is attributable to the enforcement of the union contract.
The Bank’s ongoing efforts to cut expenses restrained the other operating expenses, which remained the same as last year.
Due to the deterioration of the economic conditions, the provisions for depreciation in the value of loans increased by €262 thousand, while the loss for the quarter ended September 30, 2009 reached €819 thousand compared to a profit of €42 thousand in the corresponding period of 2008. As a result, the Bank’s profits for the nine months stood at €342 thousand compared to €2.4 million in the corresponding period of 2008.
