Noteholders approve conversion

15 December 2008

Orchard Group Capital Limited (Orchard Group Capital), a subsidiary of Orchard Funds Limited (Orchard), has announced that a proposal to convert notes issued by Orchard Group Capital to equity in Orchard was approved at a meeting of Noteholders held today.

The proposal was passed by an overwhelming majority, with over 97% of votes cast being in favour of the conversion.

Under the conversion, Noteholders will be issued 574.45 shares for each note held on the implementation date, with existing notes cancelled. Existing notes will convert into shares in Orchard in the near future.

Following the conversion, former Noteholders will collectively own 90% of Orchard’s issued shares.

Commenting on the announcement, David Hinde, CEO of Orchard said the decision by Noteholders was a significant step in securing the future of Orchard.

“Orchard has the right business platform in place to succeed and recreate value when the market stabilises and confidence returns. We believe Orchard will recover value and today’s decision will put Noteholders, who are now shareholders of the company, in a strong position to benefit from that recovery”.

The conversion reduces Orchard’s debt obligation by $77 million (including the obligation to redeem the notes in March 2009). The new ownership structure enhances the company’s financial position, assists in its compliance with obligations to its principal financier and furthers Orchard’s ongoing viability through reduced risk, gearing and interest obligations.

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For further information please contact Orchard Investor and Adviser Services on 1800 008 494.

For media enquiries, please contact:
Miche Paterson
Gavin Anderson & Company
Tel. 03 9659 3000
mpaterson@gavinanderson.com.au


Orchard Securities Pty Ltd ABN 16 091 909 376 AFSL No. 241053 has prepared this for general information only. It does not take into account your current or future financial circumstances. It is important for you to consider these matters and read the relevant product disclosure statement (PDS) before you make an investment decision on holding or acquiring any financial products. Whilst due care has been taken in the compilation of this information, and we believe that the information contained herein is based on current information, we do not guarantee the absolute accuracy of such information or the integrity of source material, nor do we accept responsibility for any errors and omissions which may subsequently be found evident in our appraisal or your reliance on it.