XXI Century gives depositary interests, warrants to bondholders

XXI Century (XXIC LN) said in a trading update this morning that it issued 2,068,698 new ordinary shares, which shall be presented by depositary interests issued to holders of its 2010 Eurobonds. The company also issued 163,241 warrants to noteholders, giving them entitlement to 4,244,266 shares in the company. The warrants can be exercised from May 24, 2012 to May 24, 2013. XXI Century said the depositary interests and warrants represent a consent fee in consideration of the agreement of noteholders to its debt restructuring plan. Andriy Gostik: The news is two-fold. For bond holders, it means finalization of the approved restructuring procedure being made in due course. For shareholders, it means the slight dilution of their stakes as a result of the increase in the developer’s charter fund by 5.5% (from 37.3 mln to 39.4 mln ordinary shares). Yet, the news is unlikely to affect the stock’s price, as the positive resolution of the debt repayment issue lessens bankruptcy risk significantly for XXI Century, making the slight dilution negligible against the backdrop of the developer returning to a going concern state. Trading in the company’s stock is temporarily suspended.