Crown Capital Partners seeks to amend 6% convertibles due 2023

By Marisa Wong

Los Angeles, April 12 – Crown Capital Partners Inc. announced it will seek approval from holders of its 6% convertible subordinated debentures due June 30, 2023 to amend some terms of the debentures.

The proposed amendments will be voted on as a package and consist of the following:

• Extending the maturity date of the debentures to Dec. 31, 2024 from June 30, 2023;

• Amending the interest rate to 10% from 6%, effective July 1;

• Removing the conversion right of the debentureholders; and

• Removing the right of the company to repay the principal amount of the debentures in common shares on the new maturity date or any redemption date.

The amendments would give Crown additional short-term capital while it completes sales of assets, which should provide sufficient funds to repay the debentures in cash. Provided that the amendments are approved, the company intends to use some or all of the proceeds of those asset sales to fund the redemption of some or all of the debentures as soon as those proceeds become available.

The company is offering a consent fee of $10 per $1,000 principal amount to holders of record as of April 6.

Debentureholders may vote on or before 10 a.m. ET on May 12.

A special meeting of debentureholders will be held at the company’s offices in Toronto at 10 a.m. ET on May 16.

The effective date of the amendments would be June 30.

The amendments will only be effective if passed by an extraordinary resolution of holders of at least 66 2/3% of the principal amount of the debentures present at the meeting.

The amendments are subject to the approval of the Toronto Stock Exchange.

If the amendments are not approved by debentureholders and the stock exchange, the debentures will mature on the existing maturity date, and the company will consider the alternatives available to it to address the maturity of the debentures. These options may include arranging for alternate debt financing in order to fund the payout in cash of the principal amount or issuing common shares to settle the debentures in whole or in part at maturity.

The specialty finance company is based in Calgary, Alta.

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