XXI Century capitalizes USD 7.9 mln of debt

XXI Century (XXIC LN) shareholders, at an EGM on July 2, approved of the issuance of 105,423,464 new shares (23.6% of the pre-issuance number of shares) exchanging them for USD 7.9 mln of outstanding debt. The shares are expected to be admitted to trading on July 9 and will stand pari passu with existing shares. The total amount of converted debt includes USD 3.2 mln due to Reachcom, related to Renaissance Group, USD 0.7 mln due to current and former directors of the company and USD 4.0 mln due to Ovaro, the company’s controlling shareholder. Following the deal, Ovaro will own a 58.3% stake (vs. 60.1% previously) and Renaissance Group will get a 7.7% stake (0% previously) while free float is set to decline to 32.3% (vs. 39.9% previously). According to the company, the debt conversion helps the company to strengthen its cash position and establishes a platform for future growth. XXI Century’s total borrowings stood at USD 62.3 mln as of end-2011 (incl. USD 7.3 mln of short-term debt) while cash totaled USD 10.7 mln, according to 2011 IFRS financials released last week. The company’s revenues (rental income) amounted to USD 8.3 mln in 2011 (-20% yoy) while its loss for the year stood at USD 25.3 mln (vs. USD 53.3 mln in 2010).