By Angela McDaniels
Tacoma, Wash., March 27 - Eacom Timber Corp. sold C$40 million of 10% secured debentures due 2017 at par to Fairfax Financial Holdings Ltd. and Lansdowne UK Strategic Investment Master Fund Ltd., according to a company news release.
Fairfax purchased C$33 million of the debentures and may assign a portion of the offering to other purchasers, at its option, prior to closing. Lansdowne purchased C$7 million of the debentures.
The debentures are secured by all of the assets of the company excluding working capital.
The interest rate is subject to increase to 15% if certain corporate milestones are not reached.
Each C$1,000 principal amount of debentures comes with 5,000 detachable warrants. Each warrant is exercisable for five years at an exercise price of C$0.20 per common share. The exercise price is a 53.8% premium to the company's C$0.13 closing share price on Monday.
The warrants will permit a cashless exercise, at the option of the holder, and are transferable subject to approval from the Toronto Venture Exchange.
The transaction is expected to close by April 11.
As part of the transaction, Fairfax will be entitled to nominate at least two directors to Eacom's board upon closing.
The proceeds will be used for general corporate purposes.
Eacom Timber owns eight sawmills and related tenures. It is based in Montreal.
Issuer: | Eacom Timber Corp.
|
Issue: | Secured debentures
|
Amount: | C$40 million
|
Tenor: | Five years
|
Coupon: | 10%, subject to increase to 15% if corporate milestones are not reached
|
Price: | Par
|
Warrants: | 5,000 detachable warrants per C$1,000 principal amount of debentures
|
Warrant expiration: | Five years
|
Warrant strike price: | C$0.20
|
Agent: | Non-brokered
|
Investors: | Fairfax Financial Holdings Ltd. (for C$33 million) and Lansdowne UK Strategic Investment Master Fund Ltd. (for C$7 million)
|
Pricing date: | March 27
|
Settlement date: | By April 11
|
Stock symbol: | TSX Venture: ETR
|
Stock price: | C$0.13 at close March 26
|
Market capitalization: | C$67.04 million
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.