- Any Debentureholder that votes for the Debentureholder
Resolution will receive a cash consent fee of $10 per $1,000
principal amount of Debentures held by the
Debentureholder.
- The deadline to submit vote is October 16, 2024, on or before 10:00 a.m. (Eastern Time).
CALGARY,
AB, Sept. 16, 2024 /CNW/ - Crown Capital
Partners Inc. ("Crown" or the "Corporation") (TSX: CRWN) today
announced that it has mailed an information circular (the
"Circular") and related meeting materials (collectively, the
"Meeting Materials") in connection with the upcoming special
meeting of the holders (the "Debentureholders") of its 10%
unsecured subordinated debentures due December 31, 2024 (the "Debentures") to be held
at the offices of the Corporation, 33 Yonge Street, Suite 901,
Toronto, ON, M5E 1G4, on
October 18, 2024 at 10:00
a.m. (Eastern Time) (the "Meeting").
As previously announced by Crown, at the Meeting,
Debentureholders will be asked to consider and vote upon a
resolution (the "Debentureholder Resolution") that, if approved,
would:
- authorize and approve certain amendments (the "Initial
Debenture Amendments") to the terms of the Debentures to: (i)
extend the maturity
date of the Debentures from December 31, 2024 to December
31, 2026; (ii) amend the interest rate on the Debentures from 10%
to 11% effective a minimum of five trading days following the
approval of the Debentureholder Resolution and from 11% to 12%
effective as of December 31, 2025;
and (iii) amend the interest payment dates from occurring
semi-annually on June 30 and
December 31 of each year to occurring
annually on December 31 of each year,
with the next payment to occur effective December 31, 2025 for the interest accrued on the
Debentures from June 30, 2024 up to,
but excluding, December 31, 2025;
and
- waive the default by the Corporation under the Indenture for
the failure to make the interest payment on the Debentures (the
"Deferred Interest Payment") due on June 30,
2024 (the "Default Waiver"), subject to the requirement that
the Corporation make the Deferred Interest Payment to
Debentureholders within 60 days of the approval of Debentureholder
Resolution (the "Deferred Interest Payment Deadline"). The Deferred
Interest Payment will be made to Debentureholders holding
Debentures as of a record date to be set by the Corporation
following the Meeting. In the event that the Deferred Interest
Payment is not made by the Deferred Interest Payment Deadline, the
Default Waiver will be of no further force or effect.
In addition to the Initial Debenture Amendments, the Corporation
has determined to further amend the terms of the Debentures (the
"Additional Debenture Amendment" and, together with the Initial
Debenture Amendments, the "Debenture Amendments") to grant a
security interest to TSX Trust Company (the "Indenture Trustee"),
as trustee for the Debentures, for the repayment of the Debentures
by way of a charge to and in favor of the Indenture Trustee on all
the Corporation's property and assets, subject only to Permitted
Encumbrances (as defined in the second amended and restated trust
indenture attached on Schedule "B" of the Circular (the "Amended
Indenture")). Such security shall be subordinate to Senior Security
(as defined in the Amended Indenture) and rank pari passu with any
Pari Passu Debt (as defined in the Amended Indenture). In addition,
the amount of Senior Indebtedness (as defined in the Amended
Indenture) permitted to be incurred by the Corporation ranking in
priority to the Debentures shall be limited to no more than
$30,000,000.
If the Debentureholder Resolution is approved, the board of
directors of the Corporation believe that the Debenture Amendments
and Default Waiver will provide the following benefits to
Debentureholders:
- Payment of Deferred Interest
Payment: The Corporation believes that the
extension of the maturity date will allow it to be in a better
position to pay the Deferred Interest Payment to the
Debentureholders by the Deferred Interest Payment Deadline.
- Improved Security for the Debentures. The
Debentures shall be granted a security interest by the
Corporation by way of a charge to and in favor of the
Indenture Trustee on all the Corporation's property and
assets, subject only to Permitted Encumbrances. The Debentures
shall be subordinate to Senior Security and rank pari passu with
any Pari Passu Debt. The amount of Senior Indebtedness (as defined
in the Amended Indenture) permitted to be incurred by the
Corporation ranking in priority to the Debentures shall be limited
to no more than $30,000,000.
- Extension of Maturity Date: The extension of
the maturity date will afford Debentureholders a longer period
of time during which to receive interest at a favourable rate and
will provide the Corporation with additional time to fund the
repayment of the Debentures from the proceeds of asset sales or
otherwise.
- Increased Interest Rate: Increasing the
interest rate from 10% to 11% effective a minimum of five trading
days following the approval of the Debentureholder Resolution and
from 11% to 12% effective December 31,
2025 provides a more attractive yield to
Debentureholders.
- Consent Fee: Any Debentureholder that
votes for the Debenture Amendments
will receive a cash consent
fee (the "Consent Fee")
of $10 per $1,000 principal amount of
Debentures held by that Debentureholder as of September 5, 2024 (the "Record Date")
provided that certain other conditions required
for the payment of the Consent Fee are satisfied,
including the Debenture Amendments are validly approved by
Debentureholders.
The effective date of the Debenture Amendments will be a minimum
of five trading days following the approval of the Debentureholder
Resolution. Further particulars of the expected benefits of the
Debenture Amendments and Default Waiver are described in the
Circular, which is available under the Corporation's profile on
SEDAR+ at www.sedarplus.ca.
The Debentureholder Resolution will only be effective if passed
by an extraordinary resolution of the holders of at least 66 ⅔% of
the principal amount of the Debentures present in person or by
proxy at the Meeting and entitled to vote in respect of the
Debentureholder Resolution. Management recommends that
Debentureholders vote in favor of the Debentureholder
Resolution.
The TSX has conditionally approved the Debenture Amendments. The
Debenture Amendments remain subject to the final approval of the
TSX.
Debentureholders may vote on or before 10:00 a.m. (Eastern Time) on October 16, 2024 by following the voting
instructions set out in the Circular. Only Debentureholders of
record at the close of business on the Record Date will be entitled
to vote at the Meeting.
Debentureholder Questions
Debentureholders who have any questions or require assistance
with voting may contact Michael
Overvelde, the Chief Financial Officer of the Corporation as
set forth below.
About Crown Capital Partners (TSX:CRWN)
Founded in 2000 within Crown Life Insurance Company, Crown
Capital Partners is a capital partner to entrepreneurs and growth
businesses mainly operating in the telecommunications
infrastructure, distribution services, and distributed power
markets. We focus on growth industries that require a specialized
capital partner, and we aim to create long-term value by acting as
both a direct investor in operating businesses serving these
markets and as a manager of investment funds for institutional
partners. For additional information, please visit
crowncapital.ca.
FORWARD-LOOKING STATEMENTS
This news release contains certain "forward looking
statements" and certain "forward looking information" as defined
under applicable Canadian and U.S. securities laws. Forward-looking
statements can generally be identified by the use of
forward-looking terminology such as "may", "will", "expect",
"intend", "estimate", "anticipate", "believe", "continue", "plans"
or similar terminology. Forward-looking statements in this news
release include, but are not limited to, statements, management's
beliefs, expectations or intentions regarding the Debenture
Amendments, the Default Waiver, the anticipated payment of the
Deferred Interest Payment, the timing and value of potential asset
sales, and management's intended uses of the proceeds of asset
sales. Forward-looking statements are based on forecasts of future
results, estimates of amounts not yet determinable and assumptions
that while believed by management to be reasonable, are inherently
subject to significant business, economic and competitive
uncertainties and contingencies. Forward-looking statements are
subject to various risks and uncertainties concerning the specific
factors identified in the Crown's periodic filings with Canadian
securities regulators. See Crown's
most recent annual information form for a detailed discussion of
the risk factors affecting Crown. In addition, Crown's dividend
policy will be reviewed from time to time in the context of the
Corporation's earnings, financial requirements for its operations,
and other relevant factors and the declaration of a dividend will
always be at the discretion of the board of directors of the
Corporation. Crown undertakes no obligation to update
forward-looking information except as required by applicable law.
Such forward-looking information represents management's best
judgment based on information currently available. No
forward-looking statement can be guaranteed and actual future
results may vary materially. Accordingly, readers are advised not
to place undue reliance on forward-looking statements or
information.
SOURCE Crown Capital Partners Inc.