Etablissements Delhaize Freres et Cie Le Lion S.A. (DEG)

Convertible bonds

In April 2004, Delhaize Group issued convertible bonds having an aggregate principal amount of EUR 300 million for net proceeds of EUR 295 million (the “Convertible Bonds”). The Convertible Bonds mature in April 2009 and bear interest at 2.75%, payable in arrears on April 30 of each year. The net proceeds from the issue of the Convertible Bonds were split between the liability component and an equity component. The fair value of the liability component was calculated using a market interest rate for an equivalent non-convertible bond. The residual amount, representing the value of the equity conversion option, is included in shareholders’ equity, net of income taxes. The interest charged for the year is calculated by applying an effective interest rate of 5.4% to the liability component.

The conversion price is initially EUR 57 per share, subject to adjustment on the occurrence of certain events as set out in the offering Circular. Conversion in full of the aggregate principal amount of the Convertible Bonds at the initial conversion price would result in the issuance of 5,263,158 ordinary shares. In 2007, EUR 129 million convertible bonds were converted into 2,267,528 shares, leaving EUR 171 million outstanding bonds.

Convertible bonds

In April 2004, Delhaize Group issued convertible bonds having an aggregate principal amount of EUR 300 million for net proceeds of EUR 295 million (the “Convertible Bonds”). The Convertible Bonds mature in April 2009 and bear interest at 2.75%, payable in arrears on April 30 of each year. The net proceeds from the issue of the Convertible Bonds were split between the liability component and an equity component. The fair value of the liability component was calculated using a market interest rate for an equivalent non-convertible bond. The residual amount, representing the value of the equity conversion option, is included in shareholders’ equity, net of income taxes. The interest charged for the year is calculated by applying an effective interest rate of 5.4% to the liability component.

The conversion price is initially EUR 57 per share, subject to adjustment on the occurrence of certain events as set out in the offering Circular. Conversion in full of the aggregate principal amount of the Convertible Bonds at the initial conversion price would result in the issuance of 5 263 158 ordinary shares. In 2007, EUR 129 million convertible bonds were converted into 2 267 528 shares, leaving EUR 171 million outstanding bonds.