FRAMINGHAM (03/06/2000) - Trying to avoid being dropped from the Amsterdam stock exchange's index of blue-chip companies, Baan Co. NV today said it has reached agreements to raise $41 million in equity funding.
The struggling vendor of business applications plans to issue 6.5 million shares of stock to unidentified institutional investors in exchange for $40.86 million worth of notes that weren't due to mature until December. The effect of the maneuver will be to increase the equity position on the company's balance sheet by the value of the notes.
In mid-February, the Amsterdam exchange gave Netherlands-based Baan a month to boost its shareholder equity after that number - an important measure of financial health - had been eroded by six straight quarters of losses. If Baan didn't succeed, its stock would have been put in a "special listing" category by the exchange.
Baan is paying a premium to avoid the embarrassment of a special listing. The number of shares being issued under the debt-for-equity deals announced today are more than three times what the notes were originally scheduled to be worth.
The company also said in a statement that it will extend the conversion offer to investors who hold another $149 million worth of the same notes. The wider offer is expected to start by the end of this month and last through May, Baan added.
On Friday, meanwhile, Baan said two U.S.-based executives are resigning from its supervisory board, which is similar to a U.S.-style board of directors.
Giving up their seats were Koichi Nishimura and John Barter, both of whom joined the board last June. Baan said it hasn't decided whether they will be replaced.