BKN International A.G.

August 15, 2005 02:36 ET

BKN International A.G.:Issuance of US$7 million Convertible and Cash Bonds

LONDON, UNITED KINGDOM--(CCNMatthews - Aug. 15, 2005) - BKN International A.G., ("BKN" or "the Company")(AIM:BKN)(FRANKFURT:BKQ) the Frankfurt and London listed global animation company engaged in the distribution and marketing of animated children's television programmes and related consumer products, today reports that the management has passed a resolution to issue a US$7 million Convertible Bonds and Cash Bond with Warrants ("the Bond") to Laurus Funds, a US$1 billion fund based in New York ("the Investor").

- The Bond carries a coupon of US prime plus one and is repayable in August 2010

- The Investor has the ability at any time to convert all or part of the Bond to common stock of the Company at a conversion price of EUR 4.50 per share which is at a premium to the current share price

- 20% warrant coverage at EUR 5.00 per share

- The balance of the proceeds will be used for investment in film projects for 2006/7 (90%) as well as strategic investment in India and China (10%)

- The deal is expected to close in August 2005

- The pre-emptive rights of shareholders have been excluded pursuant to the shareholders' resolution of 17 March 2005

Wayne Mowat, Chief Financial Officer of BKN, said: "These Bonds provide the Company with the liquidity to meet all of our strategic requirements for the medium term, at which point the business is expected to be self financing. As stated at the half year, the visibility over the next 18-24 months is good and the outlook for BKN continues to be strong."

BKN International A.G.

Wayne Mowat, Chief Financial Officer Tel: +44 (0) 20 7269 8680
wayne.mowat@bknkids.com www.bknkids.com

Media Enquiries:

Henry Harrison-Topham / Heather Salmond Tel: +44 (0) 20 7398 7700
henry.ht@abchurch-group.com www.abchurch-group.com

Notes to editors:

BKN International A.G. is a global animation company engaged in the distribution and marketing of animated children's television programmes and the marketing of related consumer products (licensing and merchandising) in all forms. BKN has worked on numerous successful animation projects.

The Company is currently listed on the Deutsche Bourse and AIM and it operates all over the world. BKN has successfully negotiated distribution deals in over 80 countries and territories in the children's programming market.

The Company's Film Library includes:

- Legend of the Dragon


- Kong - The Animated Series

- Kong- King of Atlantis

- Triple Threat from Outer Space

- Roswell Conspiracies

- Shanghai Tiger

- Adventures of Sonic the Hedgehog

- Pocket Dragon Adventures

- Highlander - The Animated Series

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