DQ Entertainment PLC Further re bonds & proposed issue of warrants (5516N)

TIDMDQE

RNS Number : 5516N

DQ Entertainment PLC

01 February 2016

1 February 2016

DQ Entertainment plc ("DQE" or the "Company")

Further re senior secured convertible bonds and proposed issue of warrants

The Board of DQE announces that further to the announcement on 11 January 2016 regarding the Bonds and Standstill Agreement, both as defined and detailed therein (the "Announcement"), the Company's subsidiaries, DQ Entertainment (Mauritius) Limited ("DQE Mauritius") and DQ Entertainment (Ireland) Limited ("DQE Ireland") have, on 29 January 2016, entered into a further agreement with OL Master (Singapore) Pte. Limited (the "Bondholder") in respect of the Standstill Agreement (the "Amendment Letter").

Under the Amendment Letter, it was agreed that the date set in the Standstill Agreement for the issuance of the Warrants, as defined and detailed in the Announcement, is extended from 31 December 2015 to 29 January 2016. Accordingly, on 29 January 2016, the Company issued the Warrants to the Bondholder, giving it the right to subscribe for 16,878,914 ordinary shares in the Company (subject to being proportionally increased or decreased on any reorganisation of the Company's share capital) at 5.375p per share.

The Warrants can only be exercised if within three years of their issue:

1. the Advised Change of Control Event (as defined in the Announcement) has occurred and remains continuing at the time the Warrants are exercised; or

2. at any time when an event of default (under the terms of the senior secured convertible bonds issued by DQE Mauritius and DQE Ireland) has occurred and remains continuing at the time of exercise.

The Company continues to discuss the Advised Change of Control Event with the Bondholder in good faith to resolve if any such potential breach of the Bond Instruments (as defined in the Announcement) has occurred. Consequently, the Warrants will only be exercisable if the Advised Change of Control Event has occurred and remains continuing at the time of such exercise or where another event of default occurs as per 2. above. Further announcements on this matter will be made in due course. However, under the Amendment Letter, the Bondholder has agreed that following the issue of the Warrants, it will not take any enforcement action (other than exercising the Warrants) in relation to any facts, circumstances or matters giving rise to the Advised Change of Control Event occurring up to, and including, 29 January 2016. This amends and replaces the agreement in the Standstill Agreement for the Bondholder not to take any enforcement action in relation to the Advised Change of Control Event for three months from the date of the Standstill Agreement.

The Warrants may be exercised in whole or in part and are freely transferable.

The Warrants represent approximately 29.99 per cent. of the current issued ordinary share capital of the Company.

Non-Payment Event

As announced on 11 January 2016, under the Standstill Agreement, the Bondholder has also agreed that it would not take any enforcement action in relation to the Non-Payment Event (as defined in the Announcement) and the failure to maintain the required balance within the Blocked Account (as defined in the Announcement), provided that the Warrants are issued and a sum equal to the interest payment from the Non-Payment Event is paid into the Blocked Account by no later than 29 January 2016. The Company reimbursed the Blocked Account on 29 January 2016 accordingly and therefore, together with the issue of the Warrants, has remedied this event of default.

Enquiries:

 
DQ Entertainment plc                  Tel: [phone] 
 Tapaas Chakravarti - Chairman         53726 
 and CEO 
 Rashida Adenwala - Director Finance 
 & Investor Relations 
 
  Allenby Capital Limited               Tel: +44 (0)20 
  Jeremy Porter / Alex Brearley         3328 5656 
 
  Buchanan                              Tel: +44 (0)20 
  Mark Edwards/Robbie Ceiriog-Hughes    7466 5000 
 

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February 01, 2016 02:00 ET (07:00 GMT)