On 14 December, GO plc issued an announcement making reference to the Extraordinary General Meeting being held on 15 December by Forthnet S.A. in which GO plc has an indirect investment through Forgendo Ltd. The latter, the largest shareholder in Forthnet with a 41.27% stake, is a joint venture between GO plc and its parent company Emirates International Telecommunications Malta Ltd (EITL). Forthnet’s Extraordinary General Meeting was called to ask shareholders to approve a number of changes to the share capital as well as to approve a €30 million rights issue in line with the conditions of the €90 million bond loan which formed the basis of Forthnet’s bank debt restructuring deal.
During a GO plc Board Meeting held yesterday, it was decided that given the current macroeconomic environment in Greece and the respective adverse impact on the performance on Forthnet S.A., GO requires further evaluation of the request made by Forthnet to increase shareholders’ equity through a rights issue. As a result, GO explained that it is premature for the company, through Forgendo Ltd, to commit any funds to the proposed capital increase of Forthnet through the rights issue. As such the Directors, in collaboration with EITL, have decided to require Forgendo to request Forthnet to postpone all the items on the agenda of the Extraordinary General Meeting to Friday 13 January 2012.
GO stated that its Directors will again re-assess the situation at Forthnet and Greece prior to the proposed date in January 2012 and take a position whether to support or otherwise the proposed share capital increase of Forthnet at the time.
In the announcement, the Directors warned that the postponement of such decisions may result in a breach of the conditions laid out by Forthnet’s bankers in the debt restructuring deal which amongst other calls on Forthnet to raise at least €30 million of new equity by the end of January 2012. This could lead the banks to exercise their rights in respect of the new €90 million bond loan thereby making the loans immediately payable and as a result negatively impacting the value of Forthnet.