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23
May
2012

Incap's financing negotiations with 'favourable' end

Incap Corporation has concluded its negotiations over a financing arrangement focused on the extension of the current financing agreements, the granting of a new bank loan and a rearrangement of the company's convertible loan.
The negotiated arrangement stabilises Incap's financing structure and strengthens its working capital.

Sami Mykkänen, President and CEO of Incap Group: "I'm very satisfied with the result of the negotiations. Because we negotiated over a number of elements with a number of different parties, the negotiations were long and required many stages. Now that the company's convertible loan has been arranged and the financing required for operations is guaranteed, we can focus all of our efforts on our key operations and their development."

Convertible loan

In 2007, Incap Corporation issued a convertible loan of EUR 6.75 million which expires on 25 May 2012. The company has agreed upon re-financing for the convertible loan so that a part of the convertible loan's holders converts it to a new convertible loan, while the company redeems the loan share of the remaining holders.

It has been agreed with some holders of the convertible loan that the company issues a new convertible loan at a nominal value of EUR 2,916,000. According to the key terms of the new convertible loan, the loan will expire through a single instalment on 25 May 2017, and annual interest of 7% will be paid on the loan. The new convertible loan's subscription price will be paid by converting the loan shares of the 2007 convertible loan. During the loan conversion, the share-specific subscription price will be determined so that the subscription price is 25% higher than the average volume-weighted exchange rate of the company's shares over a period of two weeks prior to the issuance date of the loan.

In the redemption arrangement, the company redeems or purchases the loan shares of the convertible loan's holders at a price of EUR 2,751,840. The redemption price is in average 25% lower than the loan's nominal value. The loan shares to be redeemed represent a total of EUR 3,834,000 of the convertible loan's capital effective in 2007. The loan shares will be redeemed during 2012 following the schedule agreed upon with the loan holders. Incap is planning to launch a share issue by the end of 2012 to gain capital for the redemption of the convertible loan.

Loan and other financing agreements

Incap's domestic financier banks have announced that they will renew the company's current financing agreements expiring in May, and grant a new loan of EUR 2.5 million for the company. Of the loan, EUR 1 million will be withdrawn in near future and EUR 1.5 million can be withdrawn once the 2007 convertible loan has been redeemed in full.

The financing agreements are valid until further notice. The agreements' covenants include threshold values related to equity and net IBD/EBITDA. The covenants will be reviewed for the first time in December 2012, and after that by six-month review periods.
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