Chinese online and mobile telephone gaming technology provider PacificNet Incorporated has agreed a settlement agreement with bondholders that had been seeking Chapter 11 relief.
Agreed in Delaware Federal Bankruptcy Court, the deal will see PacificNet amend and restate the terms of certain convertible debentures in its aggregate principal of approximately $6.2 million. In addition, it will pay $150,000 of its obligations under the debentures in cash and issue 668,322 shares of common stock to bondholders upon conversion of a portion of the debentures. The remaining outstanding debentures in its aggregate principal of approximately $5.5 million will be convertible at a conversion price of two dollars a share, subject to the terms and conditions of the debentures.
The agreement also states that PacificNet will make ten monthly payments under the debentures and apply sums due under certain receivables toward payment. All obligations of the firm to bondholders are due on or before July 15 of next year while bondholders have already received a security interest and collateral assignment in receivables.
''We are very glad to settle our differences with the bondholders so we can move forward to focus on the Asian gaming technology strategy,” said Victor Tong, President for PacificNet.
“We'd like to thank them for their support while PacificNet has been transforming itself throughout the years. We will continue to strive for the best return for our shareholders in this turbulent market. We believe gaming is recessionary proof due to the increased wealth across Asia and China and that PacificNet is well-positioned to take advantage of the market in the future.'
PacificNet is set to also issue new debentures to shareholders representing amounts owed to them, which will be due in the event that the firm does not comply with the terms of its agreement.