CanAm Enters Binding Agreements to Convert into Equity Outstanding Debentures that Mature in August 2016
2014年5月20日 - 2:14AM
Access Wire
Calgary, AB / ACCESSWIRE / May 19, 2014
/ CanAm Coal Corp. (COE TSX-V) ("CanAm" or the "Company") is pleased to announce
that it has entered into binding agreements (the
"Purchase
Agreements") with
certain holders of its 9.5% unsecured non-convertible debentures,
due August 7, 2016 (the "2016 Debentures"), to repurchase,
at par, an aggregate amount of approximately $7.3 million of the
2016 Debentures. The Company has entered into the Purchase
Agreements in relation to certain obligations of the Company to
satisfy debt under its existing equipment financing agreement with
its US banking partner.
On April 18, 2014, the
Company, through its subsidiary Birmingham Coal & Coke Co,
Inc., agreed with its US banking partner to amend its existing
equipment financing agreement. The main changes were to increase
the principal amount of the loan by US $3 million (with a term of
54 months) and to reset the amortization period for the outstanding
amount of the original loan (US $13.2 million outstanding at April
2014) to 48 months. The blended interest rate on the facility is
4.04%. Included in the revised agreement is a covenant requiring
the Company to use the proceeds of an issuance of common shares in
the capital of the Company (the "Common Shares") to satisfy at
least $6,500,000 of its 2016 Debentures, prior to July 31,
2014.
In order to complete the
repurchase required by the covenant, the Company has entered into
the Purchase Agreements with holders of approximately $7.3 million
of the 2016 Debentures. The Purchase Agreements provide that CanAm
will repurchase, at par, the 2016 Debentures. The purchase price
will be paid through the issuance of Common Shares that will be
issued at a price which is the greater of (a) the volume weighted
average price of the Common Shares over the ten trading days
immediately prior to the date of issuance of such shares; and (b)
such market price as of such date as may be determined pursuant to
the policies of the TSX Venture Exchange (the "TSXV").
Each of the holders of the
2016 Debentures who have entered into the Purchase Agreements are
insiders of the Company and the completion of the transactions
contemplated by the Purchase Agreements including the issuance of
the Common Shares are subject to all necessary regulatory approvals
and requirements, including the approval of the TSX Venture
Exchange and compliance with TSXV Policy 5.9 with respect to
related party transactions. Shareholder approval may be required.
The anticipated closing date of the transactions contemplated by
the Purchase Agreements is July 24, 2014.
Company President and CEO, Jos
De Smedt commented: "This is an important component of our strategy
to improve the Company's financial position and we are extremely
pleased that we now have binding commitments to convert 50%+ of the
outstanding $13.1 million debenture debt that matures in August
2016."
For Further
Information:
CanAm
Corporate Office:
Jos De Smedt, President &
CEO
Tel: 403.262.3797
Toll Free: 1.877.262.5888
Email: jdesmedt@canamcoal.com
Neither the TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Advisory Respecting
Forward-Looking Statements:
This news release contains
certain "forward-looking information and statements" within the
meaning of applicable securities laws. The use of any of the words
"expect", "anticipate", "continue", "estimate", "objective",
"ongoing", "may", "will", "project", "should", "believe", "plans",
"intends", "confident", "might" and similar expressions are
intended to identify forward-looking information or statements. In
particular, this news release contains forward looking statements
pertaining to:; the anticipated closing date of the transactions;
the anticipated conversion price of the 2016 Debentures and issue
price of the Common Shares to be issued pursuant to the Purchase
Agreements; and the performance of the debt covenant. Various
assumptions were used in drawing the conclusions contained in the
forward-looking statements throughout this news release.
The forward-looking
information and statements included in this news release are not
guarantees of future performance and should not be unduly relied
upon. Forward-looking statements reflect management's current
beliefs and assumptions, based on information currently available
to management. A number of factors could cause actual results to
differ materially from the results discussed in the forward-looking
statements, many of which are beyond the control of the Company.
Among the material factors that could cause actual results to
differ materially from those indicated by such forward-looking
statements are: that the information is of a preliminary nature and
may be subject to further adjustment;; failure to obtain the
required approvals for the transactions and the issuance of the
Common Shares; failure to convert the required amount of debentures
pursuant to the terms of the U.S. debt facility; as well as those
factors discussed in or referred to under the heading "Risk and
Uncertainties" in the Company's Management's Discussion &
Analysis dated April 29, 2014 available at www.sedar.com. Such
information and statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking information or statements.
The
Company cautions that the foregoing list of assumptions, risks and
uncertainties is not exhaustive. The forward-looking information
and statements contained in this news release speak only as of the
date of this news release, and the Company assumes no obligation to
publicly update or revise them to reflect new events or
circumstances, except as may be required pursuant to applicable
securities laws.
SOURCE: CanAm Coal Corp.
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