Versatel Telecom International N.V
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VERSATEL TELECOM INTERNATIONAL N.V. (a public company with limited liability incorporated under the laws of The Netherlands, with its corporate seat in Amsterdam, The Netherlands) Offer of 418,839,316 new ordinary shares in a rights offering at an issue price of €0.61 per ordinary share We are offering 418,839,316 new ordinary shares with a nominal value of €0.02 each (the “Offer Shares”). The Offer Shares are being offered initially to shareholders who qualify as Eligible Persons (as defined in “Selling and Transfer Restrictions – Representations and Warranties by Investors in the SETs Offering and the Rump Offering” on page 138 of this Prospectus) who may lawfully subscribe for Offer Shares pro rata to their shareholdings at an issue price of €0.61 per Offer Share (the “Issue Price”), subject to applicable securities laws and on the terms set out in this Prospectus. For such purpose, and subject to applicable securities laws, our shareholders who are Eligible Persons as of the Record Date (as defined below) are being granted transferable subscription entitlements (“SETs”) that will entitle them to subscribe for the Offer Shares at the Issue Price. Such offering is referred to in this Prospectus as the “SETs Offering”. Application has been made to admit the SETs to trading on Euronext Amsterdam N.V.’s Eurolist by Euronext (“Euronext Amsterdam”). We expect trading in the SETs will commence on Euronext Amsterdam on 15 February 2007, and will continue until 13:15 hours (Central European Time) on 28 February 2007. The SETs will be admitted to trading under the symbol “VERST”. Investing in the Offer Shares and trading in the SETs involves certain risks. See “Risk Factors” beginning on page 12 of this Prospectus to read about factors you should carefully consider before investing in the Offer Shares or trading in the SETs. Each ordinary share held immediately after the close of trading in our ordinary shares on Euronext Amsterdam at 17:40 hours (Central European Time) on 14 February 2007 (the “Record Date”) will entitle such shareholder who qualifies as an Eligible Person to one SET. An Eligible Person (whether a shareholder of ours on the Record Date or a subsequent transferee of SETs) will be entitled to subscribe for 4 Offer Shares at the Issue Price for every 5 SETs held. Accordingly, if an Eligible Person is a shareholder of ours entitled to a grant of SETs and has not transferred its SETs, it will have, subject to the terms and conditions described herein, the right to subscribe for 4 Offer Shares for every 5 ordinary shares held on the Record Date. Eligible Persons holding SETs may subscribe for Offer Shares through the exercise of SETs from 15 February 2007 until 15:30 hours (Central European Time) on 28 February 2007 (the “Exercise Period”). If you are an Eligible Person and you have not validly exercised your SETs by the end of the Exercise Period, you will no longer be able to exercise those SETs. Once you have exercised your SETs, you cannot revoke or modify that exercise, except as otherwise described herein in “The Offering – SETs Offering – Exercise Period”. After the Exercise Period for the SETs has expired, any Offer Shares not subscribed and paid for through the exercise of the SETs (collectively, the “Rump Shares”), will be available for subscription in a private placement with institutional and professional investors in The Netherlands and elsewhere (the “Rump Offering” and together with the SETs Offering, the “Offering”), facilitated by ING Bank N.V. as the sole global coordinator for the Offering (the “Sole Global Coordinator”). The Rump Offering will be subject to the terms and conditions of a Share Placement Agreement between us and the Sole Global Coordinator dated 14 February 2007 (the “Share Placement Agreement”) and the price per Offer Share in the Rump Offering will be at least equal to the total of €0.70 and any selling expenses related to such private placements (including any value added tax (“VAT”)). References herein to the “Offer Shares” include the Rump Shares. The Sole Global Coordinator shall not actively solicit purchasers for the Rump Offering or otherwise actively market the Offering. Our largest shareholder, Tele2 Finance B.V. (“Tele2 Finance”), a wholly owned subsidiary of Tele2 AB (“Tele2”), has agreed to (i) exercise the SETs granted to it in the SETs Offering at the Issue Price and (ii) acquire any Offer Shares which are not placed in the Rump Offering at €0.70 per Offer Share, subject to the terms and conditions of an agreement between Tele2 Finance and us dated 25 January 2007 (the “Commitment Agreement”). Tele2 Finance currently holds all of our outstanding 3.875% convertible senior notes due 2011 (the “Convertible Notes”) as well as 80.3% of our outstanding ordinary shares (85.0% on a fully diluted basis, assuming conversion as of the date of this Prospectus of our Convertible Notes owned by Tele2 Finance). Upon the closing of the Offering, the conversion price of the Convertible Notes shall be recalculated according to a formula set forth in the terms of the Convertible Notes. If all of the Offer Shares were acquired by Tele2 Finance in the Offering, Tele2 Finance would own 90.5% of our outstanding ordinary shares (on a fully diluted basis and based on (i) no recalculation of the conversion price of the Convertible Notes as a result of the Offering and (ii) conversion of the Convertible Notes at their current conversion price of €0.76 per share) after the closing of the Offering. The Rump Offering is expected to commence on 1 March 2007 and to end no later than 17:30 hours (Central European Time) on 1 March 2007. After the Exercise Period has ended, we will announce the results of the SETs Offering by means of a press release. After the Rump Offering has ended, we will announce the results of the Rump Offering by means of a press release, including the aggregate number of Offer Shares subscribed and paid for, the recalculated conversion price of the Convertible Notes and the percentage of ordinary shares that Tele2 Finance owns on a fully diluted basis, assuming conversion of the Convertible Notes. The statutory pre-emptive rights (voorkeursrechten) of holders of our ordinary shares have been excluded with respect to the Offering. We are not taking any action to permit a public offering of the SETs or the Offer Shares in any jurisdiction outside The Netherlands. The SETs are being granted by us and the Offer Shares are being offered by us only in those jurisdictions in which, and only to those persons to whom, granting of the SETs and offers of the Offer Shares (pursuant to the exercise of SETs or otherwise) may lawfully be made. It is expected that payment for and delivery of the Offer Shares will be made on or about 6 March 2007 (the “Closing Date”). The SETs and the Offer Shares have not been and will not be registered under the US Securities Act of 1933 (the “Securities Act”), and may not be offered, granted, issued, sold, taken up, delivered, renounced, or transferred in or into the United States. Accordingly, the SETs are being granted and the Offer Shares are being offered by us only in transactions that are exempt from registration under the Securities Act pursuant to Regulation S thereunder (“Regulation S”). Potential investors in the SETs or the Offer Shares should carefully read “Selling and Transfer Restrictions”. Application has been made to admit the Offer Shares to trading on Euronext Amsterdam. We expect that trading in the Offer Shares will commence on Euronext Amsterdam on 6 March 2007, barring unforeseen circumstances. Our ordinary shares are admitted to trading on Euronext Amsterdam under the symbol “VRSA”. On 13 February 2007, the closing price of our ordinary shares on Euronext Amsterdam was €0.78 per share. The SETs and the Offer Shares will be delivered through the book-entry facilities of Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V. (“Euroclear Nederland”), as well as through Euroclear Bank S.A./N.V. as operator of the Euroclear System (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream Luxembourg”). If the closing of the Offering does not take place on the Closing Date, the Offering may be withdrawn. In such an event, both the exercised and unexercised SETs will be forfeited without compensation to their holders, and subscriptions for and allotments of Offer Shares that have been made will be disregarded. Any subscription payments received by us will be returned, without interest. Any such forfeiture of SETs will be without prejudice to the validity of any settled trades in the SETs. There will be no refund in respect of any SETs purchases in the market. All dealings in SETs and Offer Shares prior to the closing of the Offering are at sole risk of the parties concerned. Euronext Amsterdam does not accept any responsibility or liability to any person as a result of the withdrawal of the Offering or (the related) annulment of any transactions on Euronext Amsterdam. This document constitutes a prospectus for the purposes of Article 3 of the Directive 2003/71/EC (“Prospectus Directive”) and has been prepared in accordance with Article 5:2 of the Financial Supervision Act (Wet op het financieel toezicht) (the “Financial Supervision Act”) and the rules promulgated thereunder. This Prospectus has been approved by and filed with The Netherlands Authority for the Financial Markets (Stichting Autoriteit Financiële Markten; “AFM”). Kempen & Co Corporate Finance B.V. (“Kempen”) was requested by our Special Committee (as defined below) to perform a valuation of us, Tele2 (Netherlands) B.V.