The Asian online and mobile gaming technology provider PacificNet Inc., has reached a settlement in its litigative dispute with bondholders in a Delaware federal bankruptcy court, where the plaintiffs had sought Chapter 11 relief.
In compliance with the agreement, PacificNet has amended and restated the terms of certain convertible debentures in the aggregate principal amount of approximately $6.2 million. Upon entering into the agreement, the PacNet paid $150 000 of the obligations under the Debentures in cash and issued 668 322 shares of common stock to the bondholders upon conversion of a portion of the Debentures.
The remaining outstanding Debentures in the aggregate principal amount of approximately $5.5 million are convertible at a conversion price of $2.00 per share.
PacificNet has agreed to make 10 monthly payments under the Debentures and also apply sums due under certain receivables toward payment. All obligations of the Company to the bondholders under the Debentures are due on or before July 15, 2009, and the bondholders have received a security interest and collateral assignment in receivables of the company and certain of its subsidiaries.
Additionally, PacificNet has issued to the bondholders new debentures representing additional amounts owed to them, which will be due in the event that the company does not comply with the agreement.
Finally, the parties have agreed that the bankruptcy action and all related pending litigation will be immediately dismissed without prejudice immediately. On December 15, 2008, provided there are no defaults under the settlement documents, these dismissals would be with prejudice.
Victor Tong, President of PacificNet, said: ''We are very glad to settle our differences with the bondholders so we can move forward to focus on the Asian Gaming Technology Strategy. 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."