CALGARY, AB, Dec. 16, 2020 /CNW/ - Gear Energy Ltd. (TSX:
GXE) ("Gear" or the "Company") is pleased to announce
that Gear shareholders have approved the amendments to Gear's
outstanding convertible unsecured subordinated debentures (the
"Debentures") at a special meeting (the "Meeting") of
shareholders held today. The amendments were approved by
shareholders holding in excess of 97% of the Gear common shares who
voted in person or by proxy at the Meeting. There is presently
approximately $13.2 million principal
amount outstanding under the Debentures.
Under the amended terms of the Debentures, effective
December 1, 2020 the Debentures will
bear interest at a rate of 7.0% per annum and will mature on
November 30, 2023. In addition, the
Company will have the option to pay interest in-kind on the
Debentures for the period from December 1,
2020 to November 30, 2021 by
issuing additional Debentures to the holders of the Debentures. The
Debentures are convertible at any time at the option of the holder
of any Debentures and the conversion price of the Debentures has
been amended from $0.87 per common
share to $0.32 per common share. The
Debentures will be redeemable by the Company at any time by fully
repaying the principal amount and all accrued interest owing on the
Debentures on the date selected for redemption or, at the option of
the Company, by issuing common shares in respect of the principal
amount owing at an issue price equal to 95% of the volume weighted
average trading price of the common shares on the Toronto Stock
Exchange (the "TSX") for the 20 trading days ending 5
trading days prior to the redemption date.
Burgundy Asset Management Ltd. ("Burgundy") currently
holds Debentures in an aggregate $9,402,000 principal amount of Debentures,
representing 71.3% of the issued and outstanding Debentures.
Burgundy also currently holds approximately 23,135,776 Gear common
shares representing approximately 10.7% of the issued and
outstanding common shares. The shareholder approval was required in
accordance with the rules of the TSX because Burgundy would receive
greater than 10% of the currently issued and outstanding Gear
common shares on conversion of the Debentures based on the amended
conversion price.
Further details regarding the amendments to the Debentures can
be found in Gear's management information circular dated
November 16, 2020 delivered to
shareholders in respect of the Meeting, which is available on
Gear's profile on SEDAR at www.sedar.com.
SOURCE Gear Energy Ltd.