Crew Gold sets meeting date for bondholder vote on restructuring

By Angela McDaniels

Tacoma, Wash., Aug. 20 - Crew Gold Corp. bondholders will vote on the company's proposed restructuring of the bonds at a meeting on Sept. 1, according to a company news release.

When plans for the restructuring were announced Aug. 17, the meeting date had not yet been set.

Crew Gold has about $99.8 million of senior secured bonds due March 30, 2011, $193.5 million of unsecured convertible bonds due Dec. 1, 2010 and $20.2 million of unsecured bonds due Oct. 27, 2009 outstanding.

Under the proposed restructuring, the company would convert $148.2 million of the bonds into common shares, including $20 million, or 20%, of the senior secured bonds, $116.1 million, or 60%, of the convertibles and $12.1 million, or 60%, of the unsecured bonds.

The company is also planning a rights offering. Depending on the number of shares issued in the rights offering, the conversion price for the bonds denominated in Norwegian krone would be NOK 4.02 to NOK 4.61 and the conversion price for the bonds denominated in dollars would be $0.67 to $0.76.

The total number of shares issued to bondholders would be the number of shares required to ensure that the bondholders have an ownership interest of 53% following the restructuring.

In exchange for approval of the restructuring, the company said it will:

• Provide additional security for the bonds;

• Amend the terms of the bonds so that it can only pay dividends, repurchase shares, incur additional debt or dispose of assets used in the operation of the Lefa gold mine with the approval of the bond trustee;

• Increase its board of directors to eight members from seven and appoint four individuals nominated by its principal bondholders to the expanded board: Robert Byford, Mitchell Gropper, Gordon Lawson and Jan Oksum.

Under the rights offering, shareholders will be given subscription rights that will entitle them to purchase up to 90 million common shares of Crew Gold for a total purchase price of NOK 90 million.

The proposed restructuring of the bonds is subject to the separate approval of the holders of the senior secured bonds, the holders of the krone-denominated tranche of the convertibles, the holders of the dollar-denominated tranche of the convertibles and the holders of the unsecured bonds.

In each case, the proposed transaction must be approved by two-thirds of bondholders represented in person or by proxy at the bondholder meeting.

Crew Gold said it has entered into voting support agreements with the most significant holders of the senior secured bonds and convertibles.

The subscription period for the rights issue will run from Sept. 8 to Sept. 22, and the rights issue and bond restructuring are expected to settle Oct. 9.

The adviser for the restructuring is Arctic Securities ASA (call Tom Hestnes at +47 21 0132 62 or Kim Galtung Dosvig at +47 21 0131 13).

Crew Gold is a resource exploration company based in London.

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