TSX Venture Exchange Symbol FNR and FNR.DB.B
/NOT FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/
SASKATOON, March 26, 2015 /CNW/ - 49 North Resources Inc.
("49 North" or the "Company") (TSXV: FNR) announces that it intends
to seek the approval of the holders of its 9% Convertible Unsecured
Subordinated Debentures due June 29,
2017 (the "Debentures") to exchange the principal amount of
the Debentures, for a combination of common shares ("Common
Shares") of the Company, First Preferred Series 1 Shares (the
"Preferred Shares") of the Company to be created for the purposes
of the transaction and an interest in new 2.5% senior secured
convertible debentures (the "New Debentures") of the Company to be
created for the purposes of the transaction (the "Proposal"). The
Debentures currently trade on the TSX Venture Exchange under the
symbol "FNR.DB.B".
Under the terms of the Proposal, holders of the Debentures will
receive 150 Common Shares, 25 Preferred Shares and $25 principal amount of the New Debentures per
$100 principal amount of Debentures
held, in full and final settlement of the amounts owing, including
interest. The Preferred Shares are intended to have the
following characteristics:
- Cumulative 2.5% cash dividends (equal to $0.025 per share) payable annually, in arrears,
beginning on the first anniversary of the date of issuance;
- Non-voting;
- Convertible, at the holder's option, into Common Shares at a
conversion price of $0.50 per Common
Share;
- Issued at a price of $1.00 per
Preferred Share; and
- Redeemable by the Company at the issue price at any time after
the third anniversary of issuance.
The New Debentures are intended to have the following
characteristics:
- Principal amount of up to $5,000,000;
- 2.5% annual interest rate, which interest will be paid in
arrears in annual installments on the anniversary date of issuance
to maturity (or earlier in the event of conversion);
- 5 year term;
- The outstanding principal amount of the New Debentures will be
convertible, at the holder's option, into Common Shares at a
conversion price of $0.50 per Common
Share; and
- The repayment of outstanding principal and interest of the New
Debentures will be secured by all present and after acquired
personal property of the Company.
Definitive information with respect to the Proposal, once
finalized, will be outlined in a management information circular
expected to be disseminated to the Debenture holders in April,
2015. The Proposal is made pursuant to the provisions of the Trust
Indenture for the Debentures, as amended, which allows for the
exchange of the Debentures for other securities of the Company upon
approval of at least 662/3% of the principal amount of
the Debentures voted at the meeting, either in person or by
proxy.
The rationale for the Proposal is to further secure the future
of the Company during this prolonged downturn for the junior
resource capital market while offering the highest possible
potential returns to both the existing Debenture holders and Common
Share holders.
If the Proposal is approved and implemented, it is expected that
the total number of Common Shares issued will be 18,622,771, the
total number of Preferred Shares issued will be 3,103,795 and an
aggregate of $3,103,795 principal
amount of New Debentures will be issued. The Common Shares,
Preferred Shares and New Debentures will be issued pursuant to the
"securities for debt" exemption of National Instrument 45-106
Prospectus and Registration Exemptions and will be subject
to a 4 month hold period. The Proposal is subject to the
receipt of approvals from the TSX Venture Exchange.
49 North is a Saskatchewan
focused resource investment company with strategic operations in
financial, managerial and geological advisory services and merchant
banking. Our diversified portfolio of assets includes direct
project involvement in the resource sector, as well as investments
in shares and other securities of junior and intermediate mineral
and oil and gas exploration companies. Additional information about
49 North is available at www.sedar.com.
Forward Looking Information: This release contains
forward-looking information within the meaning of applicable
Canadian securities legislation. In particular but without
limitation, this press release includes statements respecting the
successful implementation of the Proposal. There is no certainty
that the Proposal will be implemented in part or at all.
Forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those expressed or implied by such
forward- looking information. In addition, the forward-looking
information contained in this release is based upon what management
believes to be reasonable assumptions. Readers are cautioned not to
place undue reliance on forward-looking information as it is
inherently uncertain and no assurance can be given that the
expectations reflected in such information will prove to be
correct. The forward-looking information in this release is made as
of the date hereof and, except as required under applicable
securities legislation, 49 North assumes no obligation to update or
revise such information to reflect new events or
circumstances.
The securities of 49 North have not been registered under the
United States Securities Act of 1933, as amended, and may not be
offered or sold in the United
States absent registration or an applicable exemption from
the registration requirements. This release is issued for
informational purposes only and does not constitute an offer to
sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of any securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful.
Neither 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.
SOURCE 49 North Resources Inc.