Eng - IOI Group

Notes To The Financial Statements cont’d34. LONG TERM BORROWINGS cont’d34.2 USD310 Million Zero Coupon Guaranteed Exchangeable Bonds due 2009 (“1 st Exchangeable Bonds”)On 17 September 2004, the Company’s wholly-owned subsidiary, IOI Investment (L) Berhad (the “Issuer”), a companyincorporated in the Federal Territory of Labuan under the Offshore Companies Act, 1990, issued USD310 million ZeroCoupon Guaranteed Exchangeable Bonds due 2009 (“1 st Exchangeable Bonds”). The 1 st Exchangeable Bonds were issued at100% of the principal amount and listed on the Singapore Exchange Securities Trading Limited and the Labuan InternationalFinancial Exchange and will mature on 18 September 2009. The 1 st Exchangeable Bonds are unconditionally and irrevocablyguaranteed by the Company.The salient features of the 1 st Exchangeable Bonds are as follows:i. The 1 st Exchangeable Bonds are exchangeable at any time on and after 28 October 2004 and prior to 8 September2009 by holders of the 1 st Exchangeable Bonds (the “Bondholders”) into newly issued ordinary shares of the Company(the “IOI Shares”), at an initial exchange price of RM11.06 per ordinary share of RM0.50 each at a fixed exchange rateof USD1.00 = RM3.80 (the “Exchange Price”). The Exchange Price is subject to adjustment in certain circumstances.ii.The Issuer or the Company may, at its option, satisfy its obligation to deliver IOI Shares pursuant to the exercise of theright of exchange by a Bondholder, in whole or in part, by paying to the relevant Bondholder an amount of cash inUS Dollar equal to the product of the number of IOI Shares otherwise deliverable and the volume weighted average ofthe closing price of the IOI Shares for each day during the 10 trading days immediately before the exchange date.iii.The 1 st Exchangeable Bonds are redeemable in whole or in part, at the option of the Issuer at the issue price plusaccrual yield of 0.875% compounded semi-annually (“Accreted Principal Amount”):a) on or after 1 October 2007, if:• the closing price of the IOI Shares translated into US Dollar at the prevailing screen rate, is at least 130%of the Accreted Principal Amount divided by the exchange ratio for a period of any 20 consecutivetrading days in the period of 30 consecutive trading days immediately preceding the date of the notice ofredemption; and• the closing price of the IOI Shares is at least 130% of the Accreted Principal Amount divided by theexchange ratio for a period of any 20 consecutive trading days in the period of 30 consecutive tradingdays immediately preceding the date of the notice of redemption; orb) at any time, if less than USD10 million in aggregate principal amount of the 1 st Exchangeable Bonds remainoutstanding.201ANNUAL REPORT 2007IOI Corporation Berhad