Ina proposes the issuance of convertible bonds in the amount of 1.5 billion kuna

The General Assembly of Ina has proposed the issuance of convertible bonds in the amount of 1.5 billion kuna, with the right to subscribe to these bonds, which grant the right to convert into shares, being held by the majority shareholders – MOL and the Croatian state, while the preemptive rights of other shareholders in the subscription will be excluded, according to the proposals of the Management Board of Ina for the General Assembly convened for May 18.

The invitation and agenda proposal for the Ina assembly were published today on the Zagreb Stock Exchange and in the daily newspaper "Vjesnik". In addition to the decisions on the issuance of convertible bonds and the conditional increase of share capital, the General Assembly was also proposed a decision on covering last year’s loss of Ina d.d. – a loss of 631.35 million kuna would be covered from retained earnings amounting to 343.46 million kuna, while the remaining 287.89 million kuna would be covered from other reserves of the company. The General Assembly of Ina was also proposed a decision to exclude the preemptive rights in the subscription of convertible bonds, which would establish that the majority shareholders of Ina – MOL and the Republic of Croatia, have the right to subscribe to the convertible bonds.

The preemptive rights of other shareholders in the subscription of convertible bonds are excluded, as stated in the proposed decisions. The decision on the issuance of convertible bonds specifies that bonds with the right to convert into shares will be issued in the total amount of 1.5 billion kuna. The nominal value per convertible bond would be determined by the Management Board of Ina, and these bonds, provided they are fully paid, would grant the holder the right to convert them into ordinary shares of Ina. Convertible bonds "would be issued at a price corresponding to their nominal value, with a maturity date to be determined by the Management Board of the company and which will not be later than the fifth anniversary of the expiration of the subscription period for convertible bonds."

The conversion ratio of the bond to share would be "one for one". The assembly was also proposed a decision on the conditional increase of share capital which specifies that "in order to realize the creditors’ right to convert convertible bonds into ordinary shares with a nominal value of 900 kuna, the current share capital of Ina, which amounts to nine billion kuna, is increased by a total amount of 900 kuna multiplied by the number of shares issued upon the conversion of convertible bonds (conditional increase of share capital)."

Such an increase in share capital would be carried out by issuing ordinary shares of series B in a total amount of up to 1.5 billion kuna, with a nominal value of 900 kuna per share. The preemptive right to subscribe to these shares can only be exercised by holders of convertible bonds that have been fully paid, and the subscription of shares for the purpose of converting bonds must be executed within a period starting from the day of payment of convertible bonds after their subscription and lasting until the twentieth day before their maturity.

One month before the General Assembly scheduled for May 18, an extraordinary General Assembly of Ina will be held on April 19, where amendments to the Statute will need to be adopted, which also regulate the conditional increase of share capital, i.e., regulate that the General Assembly of Ina can make a decision to increase the company’s share capital "to convert convertible bonds into shares or to realize the preemptive right to subscribe to new shares granted by the company."   (H)