OTTAWA, ON, Sept. 7, 2021 /CNW/ - Enablence Technologies Inc.
("Enablence" or the "Company") (TSXV: ENA), a
supplier of optical components and subsystems, is pleased to
provide an update on its previously announced recapitalization
transaction (the "Recapitalization Transaction") relating to
the status of (i) the remaining shares-for-debt settlements of the
Company (the "Shares-for-Debt Settlements"), and (ii) the
restructuring of the Company's secured term loan facility
originally advanced by Export Development Canada (the "Secured
Debt"). The Recapitalization Transaction is described in
Enablence's news release of August 23,
2021 entitled "Enablence Provides Financial Update and
Announces Recapitalization Transaction" (the "Initial
Release").
Update on Shares-for-Debt Settlement
As described in the Initial Release, the Company entered into a
debt settlement agreement with seven of its creditors who hold
approximately 77% of the total unsecured debt of the Company
proposed for settlement hereunder (collectively, the "Major
Creditors"), pursuant to which all of the debt owed by the
Company to such Major Creditors in the aggregate amount of
C$33,138,903.57 (the "Major
Creditor Debt") will be settled in exchange for the
issuance of either (i) common shares in the capital of the Company
("Common Shares") at a deemed price of C$0.025 per Common Share for 100% of the amount
of the debt, or (ii) units of the Company ("Units") at a
deemed price of C$0.025 per Unit for
80% of the amount of the debt (with the remaining 20% of the debt
being extinguished for no consideration), with each Unit comprising
of one Common Share and 1/5th of a common share purchase
warrant (each whole warrant, a "Warrant").
The Company is pleased to announce that all the Major Creditors
have accepted the terms of the Shares-for-Debt Settlement, pursuant
to which, the Company has agreed, subject to certain conditions, to
issue an aggregate of 1,108,542,312 Common Shares and 173,611,013
Warrants to the Major Creditors to settle the Major Credit Debt in
the amount of C$33,138,903.57.
The Initial Release also announced that the Company would be
making an offer to certain remaining debtholders of the Company,
holding an aggregate of C$10,660,022.24 in debt (the "Required
Remaining Debt"), which includes additional amounts owed under
short-term loans and the loan from Irixi Holding Limited (the
"Irixi Debt", as such amounts are described in Note 11 of
the condensed consolidated financial statements of the Company for
the three and nine month periods ended March
31, 2021), and certain other amounts recognized as owed by
the Company in its accounts payable and accrued liabilities. The
Company has offered the holders of the Required Remaining Debt to
settle such amounts on the same terms as the Shares-for-Debt
Settlement noted above and such offer remained open until
September 3, 2021 (the "Offer
Period").
Following the Offer Period, the Company is pleased to announce
that, as of the September 6, 2021,
holders representing C$8,149,430.85
of the aggregate Required Remaining Debt of C$10,660,022.24 have accepted the terms of the
Shares-for-Debt Settlement, pursuant to which the Company has
agreed, subject to certain conditions, to issue an aggregate of
306,314,332 Common Shares and 15,730,305 Warrants to the
above-noted holders to settle such Required Remaining Debt. As of
September 6, 2021, C$2,510,591.39 of the Required Remaining Debt
(including the Irixi Debt) remains outstanding. The Company will
extend the Offer Period to settle the Required Remaining Debt as it
is a condition to completing the Shares-for-Debt Settlement that
100% of the Required Remaining Debt enter into an agreement with
the Company to convert such debt on the same terms as the
Shares-for-Debt Settlement noted above.
In addition, completion of the Shares-for-Debt Settlement is
subject to a number of conditions, including the approval of the
TSX Venture Exchange and the approval of the shareholders of the
Company, as more particularly described in the Initial Release.
Subject to receipt of all required approvals for closing of the
Shares-for-Debt Settlement, all securities issued pursuant to the
Shares-for-Debt Settlement will be subject to a hold period of four
months and one day from the date of issuance, in accordance with
applicable securities legislation.
Update on Secured Debt Restructuring
As described in the Initial Release, the Company entered into a
letter of intent with Vortex ENA LP ("Vortex LP"), who
acquired the Secured Debt from Export Development Canada, to amend
the terms of the loan as follows:
- All prior defaults are temporarily waived and forgiven
- Maturity date extended to 48 months from the closing of the
Recapitalization Transaction, plus one six-month extension
option
- No required principal amortization for the loan duration
- Interest rate lowered from a rate ranging from Prime + 10.45%
to Prime + 12.45% to a fixed rate of 7.5% per annum, accrued for
the first twenty-four (24) months following the date of closing of
the Recapitalization Transaction, and in cash thereafter
The Company is pleased to announce that it has signed an
amending agreement to the loan agreement with Vortex LP (the
"Amending Agreement") on September 6,
2021 to amend the terms of the Secured Debt in accordance
with the terms detailed above. A copy of the Amending Agreement
will be available on SEDAR (www.sedar.com) under Enablence's issuer
profile.
About Enablence Technologies Inc.
Enablence is a publicly traded company that designs,
manufactures and sells optical components and subsystems to a
global customer base. It utilizes its patented technologies,
including planar lightwave circuit intellectual property, in the
production of an array of photonic components and broadband
subsystems that deliver a key portion of the infrastructure for
current and next-generation telecommunication systems. The
Company's components are key elements in large optical network
infrastructure builds which enable global networking and
large-scale computing for businesses and individuals, including
data centers and 5G telecommunications networks. For more
information, visit www.enablence.com.
Forward-looking Statements
This news release contains forward-looking statements regarding
the Company based on current expectations and assumptions of
management, which involve known and unknown risks and uncertainties
associated with our business and the economic environment in which
the business operates. All such statements are forward-looking
statements under applicable Canadian securities legislation. Any
statements contained herein that are not statements of historical
facts may be deemed to be forward-looking statements. In
particular, this news release contains forward-looking statements
pertaining to the timing and ability of the Company to complete the
Recapitalization Transaction, if at all; the timing and
ability of the Company to make an offer to the remaining
debtholders of the Company; the ability of the Company to complete
the Recapitalization on the terms announced, or at all; the ability
of the Company to obtain shareholder and regulatory (including the
TSX Venture Exchange) approvals of the
Recapitalization Transaction and ancillary matters; the
annual and special meeting of shareholders tentatively scheduled
for October 26, 2021; the use of
funds expected to be made available as a result of the
Recapitalization Transaction; reduction in the debt burden;
the consolidation of its common shares; and the ability of the
Company to raise proceeds under the Private Placement on terms
announced, or at all. By their nature, forward-looking statements
require us to make assumptions. Assumptions are based in part on
the future capital expenditure levels, the ability to fulfill all
conditions precedent to the closing of the
Recapitalization Transaction, the ability to secure regulatory
approval and the ability to secure shareholder approval. These
statements are based on current expectations that involve several
risks and uncertainties which could cause actual results to differ
from those anticipated. These risks include, but are not limited
to, risks relating to the Company failing to obtain the requisite
shareholder and regulatory (including the TSX Venture Exchange)
approvals of the Recapitalization Transaction and ancillary
matters; the remaining debtholders declining to convert their debt
on the same terms as the Shares-for-Debt Settlement, which may give
rise to termination rights; the terms as described hereof may be
amended following the date hereof; the impact of the evolving
COVID-19 pandemic on the Company's business, operations and sales;
uncertainties relating to the ultimate spread, severity and
duration of COVID-19 and related adverse effects on the economies
and financial markets of countries in which the Company operates;
and the ability of the Company to successfully implement its
business continuity plans with respect to the COVID-19 pandemic.
Although the Company believes that the expectations reflected in
the forward looking statements contained in this news release, and
the assumptions on which such forward-looking statements are made,
are reasonable, there can be no assurance that such expectations
will prove to be correct. We caution our readers of this news
release not to place undue reliance on our forward-looking
statements as a number of factors could cause actual results or
conditions to differ materially from current expectations.
Additional information on these and other factors that could affect
the Company's operations are set forth in the Company's continuous
disclosure documents that can be found on SEDAR (www.sedar.com)
under Enablence's issuer profile. Enablence does not intend, and
disclaims any obligation, except as required by law, to update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise.
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 Enablence Technologies Inc.
