Chemeq subscribers agree to extend convertible bond completion date

Following a trading halt, Chemeq (ASX:CMQ) has updated the market on the allotment and issue of AUD$20 million additional convertible bonds to Japanese investment group Mizuho International and related entities of investment management group Stark Investments, due on July 15.

The first tranche of convertible bonds issued by Chemeq to Mizuho, Stark Trading and Shepherd Investments International was worth $40 million from an issue of 40,000 convertible bonds and was received on March 31.

Mizuho committed to underwriting the additional $20 million investment by the companies if Chemeq options due to expire in June did not generate additional capital, bringing the total package to $60 million. The package was approved by Chemeq shareholders at a general meeting on March 23.

Only 3661 Chemeq options which expired in June were exercised at $2.40, raising $8786.

However, the investment companies questioned whether all the conditions precedent to the issue of the additional convertible bonds had been met and asked Chemeq for further information.

The information was provided and Chemeq and the investment companies have agreed to extend the completion date for the convertible bonds to July 25, at which time the convertible bonds will be allotted and issued.