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General Meeting of Bondholders

INVITATION
TO THE BONDHOLDERS OF ISSUE CONVERTABLE BONDS
ISIN BG2100024087
ISSUED BY INDUSTRIAL HOLDING BULGARIA ID:121631219

On the grounds of Article 214, para 1 of the Commercial Act, the Bondholders Representative, Strahil Nikolov Vidinov, elected with a decision of the First General Meeting of Bondholders convenes a General Meeting of the Bondholders of convertible bonds issue ISIN BG2100024087, issued by Industrial Holding Bulgaria PLC ID:121631219, on 01.07.2011 from 10.00 a.m. to be held 16-20 Alabin Str., Sofia, in the building of the Bulgarian Chamber of Commerce, the conference hall on the first floor, under the following Agenda and the following draft decisions:

1. Approval of a decision of the General Meeting of the shareholders of by Industrial Holding Bulgaria PLC on 30.06.2011, for the issuance under the conditions of an initial public offering of an issue of dematerialized, interest-bearing, convertible, freely-transferable and unsecured bonds as follows:
1.1.
Decision for the issuance under the conditions of an initial public offering of an issue of dematerialized, interest-bearing, convertible, freely-transferable and unsecured bonds with the following parameters and purpose:

  • Total nominal and issue value of the debenture loan: Up to BGN 21,718,000 /twenty-one million, seven hundred and eighteen thousand/;
  • Nominal value per bond: BGN 100 /one hundred/.
  • Issue value per bond: BGN 100 /one hundred/.
  • Number of bonds: Up to 217,180;
  • Minimal amount at which the loan is deemed as concluded:the loan shall be deemed as concluded upon subscription and payment of bonds of a total nominal value of no less than BGN 11,000,000 /eleven million/;
  • Term (maturity of the debenture loan: 3 /three/ years (36 months);
  • Interest rate: 8.00% per year;
  • Interest payment period: 6 months;
  • Procedure for conversion of bonds into shares (conversion procedure): conversion - on the maturity date of the bonds, each bond holder shall be entitled, under the terms of the debenture loan and prospectus for public offering of the issue of convertible bonds, instead of repayment of the bonds held, to exchange (convert) them for such a number of shares as would correspond to the conversion ratio valid at the time of the exchange.
  • Purpose of the debenture loan: the funds raised through the issue will be used to reimburse the debenture loan under a previous issue of convertible bonds - ISIN BG2100024087, issued by Industrial Holding Bulgaria Plc.
  • Procedure and conditions for issuance of the bonds:
    Marketing: The bonds will be issued through an initial public offering on the basis of a prospectus confirmed by the Financial Supervision Commission. After the conclusion of the debenture loan the issue will be registered for trading at Bulgarian Stock Exchange - Sofia AD, for which purpose the issue will be entered into the registry of the Financial Supervision Commission beforehand.

    Condition for subscription of bonds: Each shareholder shall be entitled to subscribe bonds from the current issue in proportion to the issued shares held by him. The persons registered as shareholders of Industrial Holding Bulgaria Plc at Central Depository no later than 14 days after the date of the General Meeting at which the decision for issuance of convertible bonds has been adopted shall be entitled to participate in the subscription of convertible bonds from the current issue.
    Each person may subscribe at least one bond and at most the number of bonds as compliant with the rights acquired or held by him as per the provisions set forth in the prospectus for the public offering of the issue of convertible bonds. Only a whole number of bonds may be subscribed, with a rounding down to the lower whole number, regardless of the figure after the decimal point.
    1.2. The General Meeting authorizes the Management Board of Industrial Holding Bulgaria Plc to select an Investment Intermediary to service the subscription of the public offering of bonds and a bank where an escrow account will be opened for depositing of the issue value of the subscribed bonds in case that a bank – payment agent to service the payments under the debenture loan is necessary and it further authorizes the Executive Director of the Company to sign contracts with the selected investment intermediary and bank.
    1.3. The General Meeting authorizes the Management Board of Industrial Holding Bulgaria Pl: As per the adopted by the General Meeting decision on the parameters of the debenture loan, at its own discretion and in the context of the specific financial market situation and the results from the preliminary marketing study and analysis of the marketability of the bonds:
    - to specify the procedure and conditions for subscription of the bonds (in particular, to determine other necessary conditions and parameters of the bond issue, including but not limited to the manner of calculation and the manner of interest payments, the conditions under which the loan will be deemed as concluded), the ratio rights/bonds and the procedure for conversion of the bonds into shares;
    - to determine the commitments to be undertaken by Industrial Holding Bulgaria PLc to the bond-holders (the so-called covenants); the conversion price, conversion ratio, and the corporate events upon which he conversion price will be adjusted and the manner of its adjustment; other conditions of the debenture loan;
    - to draft and approve a prospectus for the initial public offering of the issue of convertible bonds as per the the Initial Public Offering of Securities Act.
    - to determine any other conditions and parameters for the issue which are not determined with the present decision, to undertake any other legal and factual actions related to the offering of bonds and to request admission of the bond issue to trading at the regulated market organized by Bulgarian Stock Exchange - Sofia AD.
    The decision of the General Meeting of the shareholders to launch the present bond issue shall take effect provided that it is approved by the General Meeting of the shareholders holding convertible bonds issued by the Company.

Draft Decision: The General Meeting of the Bondholders approvs a decision of the General Meeting of the shareholders of by Industrial Holding Bulgaria PLC on 30.06.2011, for the issuance under the conditions of an initial public offering of an issue of dematerialized, interest-bearing, convertible, freely-transferable and unsecured bonds as follows:
1.1. Decision for the issuance under the conditions of an initial public offering of an issue of dematerialized, interest-bearing, convertible, freely-transferable and unsecured bonds with the following parameters and purpose:

  • Total nominal and issue value of the debenture loan: Up to BGN 21,718,000 /twenty-one million, seven hundred and eighteen thousand/;
  • Nominal value per bond: BGN 100 /one hundred/.
  • Issue value per bond: BGN 100 /one hundred/.
  • Number of bonds: Up to 217,180;
  • Minimal amount at which the loan is deemed as concluded:the loan shall be deemed as concluded upon subscription and payment of bonds of a total nominal value of no less than BGN 11,000,000 /eleven million/;
  • Term (maturity of the debenture loan: 3 /three/ years (36 months);
  • Interest rate: 8.00% per year;
  • Interest payment period: 6 months;
  • Procedure for conversion of bonds into shares (conversion procedure): conversion - on the maturity date of the bonds, each bond holder shall be entitled, under the terms of the debenture loan and prospectus for public offering of the issue of convertible bonds, instead of repayment of the bonds held, to exchange (convert) them for such a number of shares as would correspond to the conversion ratio valid at the time of the exchange.
  • Purpose of the debenture loan: the funds raised through the issue will be used to reimburse the debenture loan under a previous issue of convertible bonds - ISIN BG2100024087, issued by Industrial Holding Bulgaria Plc.
  • Procedure and conditions for issuance of the bonds:
    Marketing: The bonds will be issued through an initial public offering on the basis of a prospectus confirmed by the Financial Supervision Commission. After the conclusion of the debenture loan the issue will be registered for trading at Bulgarian Stock Exchange - Sofia AD, for which purpose the issue will be entered into the registry of the Financial Supervision Commission beforehand.
    Condition for subscription of bonds: Each shareholder shall be entitled to subscribe bonds from the current issue in proportion to the issued shares held by him. The persons registered as shareholders of Industrial Holding Bulgaria Plc at Central Depository no later than 14 days after the date of the General Meeting at which the decision for issuance of convertible bonds has been adopted shall be entitled to participate in the subscription of convertible bonds from the current issue.
    Each person may subscribe at least one bond and at most the number of bonds as compliant with the rights acquired or held by him as per the provisions set forth in the prospectus for the public offering of the issue of convertible bonds. Only a whole number of bonds may be subscribed, with a rounding down to the lower whole number, regardless of the figure after the decimal point.

    1.2. The General Meeting authorizes the Management Board of Industrial Holding Bulgaria Plc to select an Investment Intermediary to service the subscription of the public offering of bonds and a bank where an escrow account will be opened for depositing of the issue value of the subscribed bonds in case that a bank – payment agent to service the payments under the debenture loan is necessary and it further authorizes the Executive Director of the Company to sign contracts with the selected investment intermediary and bank.
    1.3. The General Meeting authorizes the Management Board of Industrial Holding Bulgaria Pl: As per the adopted by the General Meeting decision on the parameters of the debenture loan, at its own discretion and in the context of the specific financial market situation and the results from the preliminary marketing study and analysis of the marketability of the bonds:
    - to specify the procedure and conditions for subscription of the bonds (in particular, to determine other necessary conditions and parameters of the bond issue, including but not limited to the manner of calculation and the manner of interest payments, the conditions under which the loan will be deemed as concluded), the ratio rights/bonds and the procedure for conversion of the bonds into shares;
    - to determine the commitments to be undertaken by Industrial Holding Bulgaria PLc to the bond-holders (the so-called covenants); the conversion price, conversion ratio, and the corporate events upon which he conversion price will be adjusted and the manner of its adjustment; other conditions of the debenture loan;
    - to draft and approve a prospectus for the initial public offering of the issue of convertible bonds as per the the Initial Public Offering of Securities Act.
    - to determine any other conditions and parameters for the issue which are not determined with the present decision, to undertake any other legal and factual actions related to the offering of bonds and to request admission of the bond issue to trading at the regulated market organized by Bulgarian Stock Exchange - Sofia AD.
    The decision of the General Meeting of the shareholders to launch the present bond issue shall take effect provided that it is approved by the General Meeting of the shareholders holding convertible bonds issued by the Company.

2. Miscellaneous.

All bondholders or persons authorized by them are invited to take part in the General Meeting.

Right to participate and vote at the General Meeting is granted only to persons entered in the registers of Central Depository AD as bondholders 14 days prior to the date of the General Meeting, i.e. prior to 17.06.2011.

The total number of convertible bonds ISIN BG2100024087, issued by Industriale Holding Bulgaria PLC ID:121631219, is 216 496 dematerialized, interest-bearing, convertible, freely-transferable and unsecured bonds with nominal and issue value BGN 100 /hundred/ each.

Each bond gives one voting right in the General Meeting of Bondholders.

The present invitation together with the written materials related to the agenda of the General Meeting of Shareholders shall be published on the internet site of the Company – www.bulgariaholding.com - for the period from the entry of the invitation into the Trade Register to the closing of the General Meeting of Bondholders.

The written materials under 224 of the Commerce Act /CA/ are at the disposal of the bondholders also at address: Sofia City, 47 Vassil Levski Blvd., every working day from 3 p. m. to 5 p. m. as of the entry of the invitation into the Trade Register. The materials shall be provided to the shareholders upon presentation of an identity document, and to the proxies of the bondholders – upon presentation of an explicit proxy in writing, the original of which shall be kept with the archives of the Company.

The bondholders have the right to raise issues during the General Meeting.

The bondholders have the right to authorize any natural person or legal person to participate and vote at the General Meeting on their behalf, pursuant to the following rules:
1. The proxy is obliged to exercise the voting right in compliance with the instructions (directions) of the principal, contained in the power of attorney.
In case that the proxy deviates from the instructions provided in the respective power of attorney, the votes under these bonds for the respective vote are considered void.
2. The proxy may represent more than one bondholder at the General Meeting of the Company. In this case the proxy may vote differently under the shares held by the separate shareholders represented by the proxy.
3. The power of attorney for representation of a bondholder at the General Meeting of the Bondholders has to be executed in writing, with the signature of the principal certified by a notary public, and needs to refer to the specific General Meeting, to be explicit and to indicate:
a/ the full data of the bondholder – principal and of the proxy; b/ the number of bonds referred to by the power of attorney; c/ the agenda for the items raised for discussion; d/ the proposals for decisions for each of the items of the agenda; e/ the manner of voting under each of the items, or if such is not supplied, an explicit clause that the proxy has the right to discretion whether to vote and in what manner; f/ date, place and signature.

4. A template of the power of attorney for representation of a bondholder in the General Meeting is provided to the bondholders together with the materials regarding the General Meeting of the Bondholders.
5. When the power of attorney has been issued in a foreign language it is submitted to the Company together with a certified translation in the Bulgarian language pursuant to the existing Bulgarian legislation

The registration of bondholders starts at 9 a.m. on 01.07.2011 at the place where the General Meeting of the Bondholders is to be held.

To register and participate in the General Meeting the bondholders which are natural persons must present an identity document. The representatives, when lawful representatives of bondholders – legal persons have to present an identity document and a copy of the current registration certificate certified by a power of attorney issued no sooner than 3 months prior to the date of the General Meeting, and in case the same are in a foreign language, they are presented, together with a certified translation in the Bulgarian language pursuant to the existing Bulgarian legislation.

In case of lack of quorum pursuant to Article 214, Paragraph 5 in relation with Article 2227, Paragraph 3 of CA the General Meeting will be held on 18.07.2011 at 10 am at the same place and following the same agenda, and it is legally independent of the capital represented therein.

Respectfully: Strahil Vidinov, The Representative of the Bondholders of convertible bonds issue ISIN BG2100024087, issued by Industrial Holding Bulgaria PLC ID:121631219.