TORONTO, May 13, 2015 /PRNewswire/ --
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
Proceeds to be Used to Repay
Existing Convertible Debentures at October
31, 2015 Maturity
Mood Media Corporation ("Mood Media", "Mood" or the "Company")
(TSX:MM), is pleased to announce today its intention to offer
US$50 million aggregate principal
amount of 10% Senior Unsecured Notes due September 18, 2023 (the "MMG Notes") of Mood
Media Group SA ("MMG"), its indirect wholly owned Luxembourg subsidiary that holds Mood Media's
international operations, by way of private placement (the "Private
Placement"). Certain holders of Mood's outstanding 10% Convertible
Unsecured Subordinated Debentures due October 31, 2015 ("Convertible Debentures") have
agreed to provide a backstop in respect of the full amount of the
Private Placement.
The net proceeds from the Private Placement will be used to
repay Mood Media's Convertible Debentures at maturity. To the
extent the Private Placement proceeds applied are not sufficient to
fully pay the amounts required in connection with the repayment of
the Convertible Debentures, Mood Media will satisfy such deficiency
in cash and/or, subject to the approval of the TSX, Mood Media
common shares in accordance with the applicable indentures
governing the Convertible Debentures. Mood Media will notify
holders of the Convertible Debentures of the specifics of the
repayment at the required time under the terms of the applicable
indentures.
"This announcement is a major milestone on the road to
implementing a durable and efficient capital structure for Mood
Media", said Tom Garrett, EVP &
CFO of Mood Media. "The backstop agreement means we have a fully
committed $50 million arrangement to
repay at maturity the convertible debenture principal outstanding.
Furthermore, the 8-year tenor of the new notes means that Mood has
no debt maturity until 2019, providing ample runway to more fully
implement our business transformation program."
Steve Richards, Mood Media
President & CEO added, "We are excited about this transaction.
It is the culmination of months of diligent efforts to improve the
capital structure profile of Mood Media. This transaction delivers
upon yet another of Mood's commitments, to finalize a solution for
the convertible debentures in advance of their maturity in
October 2015. We can now look forward
to accelerated execution of our strategic plan to enhance growth,
generate free cash flow, integrate our global platforms, and
deliver new and compelling solutions for our clients while
enhancing shareholder value. We remain committed to delivering on
the strategic priorities outlined in the fourth quarter of 2013
when we began our transformation of Mood Media. We have been
relentless in our focus and in ensuring greater accountability
across our business for the benefit of all Mood stakeholders".
Persons subscribing for MMG Notes in the Private Placement will
also receive Mood Media common share purchase warrants (the
"Warrants"). The number of Warrants a person subscribing for MMG
Notes will receive for every $1.00 of
principal amount of MMG Notes subscribed for will vary and be based
on the date on which such person subscribes. The Warrants will have
an exercise price of Cdn$0.80 per
Mood Media common share and a term of 8 years from the date of
issue. Pursuant to the Private Placement and the Backstop
Agreement, an aggregate of 21.7 million Warrants will be
issued.
In connection with the Private Placement Mood Media and MMG has
entered into a backstop agreement (the "Backstop Agreement") with
certain holders of its Convertible Debentures, namely funds managed
by Wingspan Investment Management LP, Tålamod Asset Management LP
and Arbiter Partners Capital Management LLC (collectively, the
"Backstop Parties"). Under the Backstop Agreement, Mood and MMG may
exercise a put option (the "Backstop Put Option") to require the
Backstop Parties to purchase the full amount of the Private
Placement. In exchange for the Backstop Put Option, the Backstop
Parties will receive a put option payment equal to 4% of the
Private Placement, up to 50% of which may be payable in cash and
the remainder of which will be payable in Mood Media common shares
(at C$0.8044 per share), at the
election of the Backstop Parties. A maximum of 5 million Mood Media
common shares may be issued to the Backstop Parties as part of the
Backstop Put Option payment. The Backstop Parties will receive at
least 0.434 Warrants for every $1.00
of principal amount of MMG Notes they acquire. The Private
Placement will not materially affect control of Mood Media. A copy
of the backstop agreement will be made available under Mood's
profile on http://www.sedar.com.
The Private Placement is expected to close on or about
September 18, 2015, subject to the
satisfaction of certain customary conditions. The TSX has granted
its conditional listing approval in respect of the common shares
issuable to the Backstop Parties and underlying the Warrants issued
in the Private Placement.
The MMG Notes will be offered and sold, and the issuance of the
Warrants distributed to, persons permitted to purchase securities
on a private placement basis in accordance with applicable Canadian
and U.S. securities laws. The MMG Notes and Warrants have not been
and are not intended to be registered under the securities laws of
any jurisdiction and may not be offered or sold absent registration
or applicable exemptions from registration under applicable
securities laws.
This press release is for informational purposes only and does
not constitute an offer to sell or the solicitation of an offer to
buy the MMG Notes or the Mood Media Warrants in any jurisdiction,
nor shall there be any sale of these securities in any jurisdiction
in which such an offer, solicitation or sale would be unlawful
prior to registration and qualification under the securities laws
of any such jurisdiction. The securities being offered have not
been approved or disapproved by any regulatory authority. The MMG
Notes, the Warrants and Mood common shares have not been registered
under the United States Securities Act of 1933 (the "1933 Act") and
may not be offered or sold in the United
States or to United States
person except pursuant to an effective registration statement filed
pursuant to the 1933 Act or pursuant to an exemption or exclusion
from the registration requirements of the 1933 Act.
About Mood Media Corporation
Mood Media Corporation (TSX:MM), is one of the world's largest
designers of in-store consumer experiences, including audio,
visual, interactive, scent, voice and advertising solutions. Mood
Media's solutions reach over 150 million consumers each day through
more than half a million subscriber locations in over 40 countries
through Mood Media Corporation's client base includes more than 850
U.S. and international brands in diverse market sectors that
include: retail, from fashion to financial services; hospitality,
from hotels to health spas; and food retail, including restaurants,
bars, quick-serve and fast casual dining. Our marketing platforms
include 77% of the top 100 retailers in the United States and all of the top 50
quick-serve and fast-casual restaurant companies.
For further information about Mood Media, please visit
http://www.moodmedia.com .
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements. The
words "believe", "expect", "anticipate", "estimate", "intend",
"may", "will", "would" and similar expressions and the negative of
such expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements are
subject to important assumptions, including the following specific
assumptions: the completion of the proposed Private Placement and
the Backstop Agreement in accordance with their respective terms;
general industry and economic conditions; and changes in regulatory
requirements affecting the businesses of Mood Media. The proposed
Private Placement may not be completed or may not be completed on
the same terms as previously announced. While Mood Media considers
these factors and assumptions to be reasonable based on information
currently available, they may prove to be incorrect. Historical
performance may not be indicative of future performance. Known and
unknown factors could cause actual results to differ materially
from those projected in the forward-looking statements. Such
factors include, but are not limited to: the impact of general
market, industry, credit and economic conditions, currency
fluctuations as well as the risk factors identified in in Mood
Media's management discussion and analysis dated March 12, 2015 and Mood Media's annual
information form dated March 31,
2015, both of which are available on
http://www.sedar.com.
Given these uncertainties, readers are cautioned not to place
undue reliance on such forward-looking statements. All of the
forward-looking statements made in this press release are qualified
by these cautionary statements and other cautionary statements or
factors contained herein, and there can be no assurance that the
actual results or developments will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, Mood Media.
Forward-looking statements are given only as at the date hereof
and Mood Media disclaims any obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
laws.
Investor Inquiries: Randal
Rudniski, Mood Media Corporation, Tel: +1-512-592-2438,
Email: randal.rudniski@moodmedia.com; Media Inquiries: Sumter Cox, Mood Media Corporation, Tel:
+1-803-242-9147, Email: sumter.cox@moodmedia.com