A: The Exchange Offer reduces the principal amount of the Company’s debt obligations from US$ 180 million in respect of the Existing Bonds to up to US$ 126 million in respect of the New Bonds. This would enable the company to lower its leverage ratio, strengthen its balance sheet and be better positioned for future growth.

The New Bonds will have a lower conversion price compare to the Existing Bonds, and is therefore more likely to be converted into shares of the Company, and thereby further reduce the debt obligations of the Company when the New Bonds fall due for redemption.

Q: What will happen to the Existing Bonds that are exchanged for New Bonds?

A: The Existing Bonds that have been submitted for exchange pursuant to the exchange offer will be cancelled immediately and will not be resold.

Q: What is the impact of conversion of the New Bonds on the major shareholders?

A: The largest shareholder is Subash Menon and his associates, who own 12.84% of the Company. Upon full conversion of the New Bonds, their shareholding will drop to 4.05%.

Q: If all of the Existing Bonds are exchanged for New Bonds, what proportion of the Company’s shares will they represent upon conversion on a fully diluted basis??

A: 68%

Q: Why has the Company launched the exchange offer prior to the scheduled release of its 30 September interim results? Why not wait until those interim results have been published?

A: Both the price of the company’s shares and the price of the Existing Bonds were trending upwards. Any further delay to the launch of the Exchange Offer would have had an impact on the commercial terms of the New Bonds and exposed the company to potential market risk.

Source: http://www.hemscott.com/news/rna/detached.do?id=82806973223432