Annual Report 2012 - IOI Group

NOTES TO THEFINANCIAL STATEMENTS34. BORROWINGS (Continued)34.2 USD370 Million Zero Coupon Guaranteed Exchangeable Bonds due 2011 (“2 nd Exchangeable Bonds”)On 18 December 2006, the Company’s wholly-owned subsidiary, IOI Capital (L) Berhad (the “Issuer”), a company incorporatedin the Federal Territory of Labuan under the Offshore Companies Act, 1990, issued USD370 million Zero Coupon GuaranteedExchangeable Bonds due 2011 (“2 nd Exchangeable Bonds”). The 2 nd Exchangeable Bonds were issued at 100% of the principalamount and listed on the Singapore Exchange Securities Trading Limited and the Labuan International Financial Exchangeand matured on 18 December 2011. The 2 nd Exchangeable Bonds were unconditionally and irrevocably guaranteed by theCompany.The salient features of the 2 nd Exchangeable Bonds were as follows:i. The 2 nd Exchangeable Bonds were exchangeable at any time on and after 28 January 2007 and prior to 3 December2011 by holders of the 2 nd Exchangeable Bonds (the “Bondholders”) into newly issued ordinary shares of the Company(the “IOI Shares”) only, at an initial exchange price of RM23.50 per ordinary share of RM0.50 each with a fixed exchangerate of USD1.00 = RM3.54 (the “Exchange Price”). The Exchange Price was subject to adjustment in certain circumstances.ii.iii.The Issuer or the Company might, at its option, satisfy its obligation to deliver IOI Shares pursuant to the exercise ofthe right of exchange by a Bondholder, in whole or in part, by paying to the relevant Bondholder an amount of cashin US Dollar equal to the product of the number of IOI Shares otherwise deliverable and the volume weighted averageof the closing price of the IOI Shares for each day during the 10 trading days immediately before the exchange date.The 2 nd Exchangeable Bonds were redeemable in whole or in part, at the option of the Issuer at the issue price plusaccrual yield of 3.0% compounded semi-annually (“Accreted Principal Amount”):(a)on or after 18 December 2008, if:●the closing price of the IOI Shares translated into US Dollar at the prevailing screen rate, was at least 130% ofthe Accreted Principal Amount divided by the exchange ratio for a period of any 20 consecutive trading daysin the period of 30 consecutive trading days immediately preceding the date of the notice of redemption; and●the closing price of the IOI Shares was at least 130% of the Accreted Principal Amount divided by the exchangeratio for a period of any 20 consecutive trading days in the period of 30 consecutive trading days immediatelypreceding the date of the notice of redemption; or(b)at any time, if less than USD40 million in aggregate principal amount of the 2 nd Exchangeable Bonds remainoutstanding.iv.Unless the 2 nd Exchangeable Bonds had been previously redeemed, repurchased and cancelled or exchanged, eachBondholder has the right, at such Bondholder’s option, to require the Issuer to repurchase all or any part of its2 nd Exchangeable Bonds at the Accreted Principal Amount on 18 December 2009.v. Unless previously redeemed, repurchased and cancelled or exchanged, the 2 nd Exchangeable Bonds would be redeemedat their Accreted Principal Amount of 116.05% on 18 December 2011.On 18 December 2011, the Group redeemed and settled in full the outstanding Bonds of USD63,975,000 (equivalent toRM203,784,215) at their Accreted Principal Amount of 116.05%, which amounted to USD74,245,598 (equivalent toRM236,499,896). Following from the redemption, the Bonds ceased to be quoted on the Singapore Exchange SecuritiesTrading Limited and the Labuan International Financial Exchange.198IOI CORPORATION BERHADAnnual Report 2012