Debentures due 2026 to be sold via private placement, rights offering
By Susanna Moon
Chicago, Jan. 26 – Tuckamore Capital Management Inc. said it will issue up to C$176,228,000 principal amount of 8% senior secured debentures due 2026 and up to C$35 million principal amount of 10% second-lien secured convertible debentures due 2026.
Tuckamore has entered into a purchase agreement and a backstop commitment letter with Canso Investment Counsel Ltd. for Tuckamore's proposed refinancing announced on Dec. 22, according to a company press release.
The convertibles will be convertible into common shares at a price of C$0.35 per common share, which is a 150% premium to the company’s closing price on Jan. 25.
The company said that a minimum of C$130 million senior secured debentures will be purchased by Canso and up to C$46,228,000 will be made available to other accredited investors. Any of the senior secured debentures not issued will be purchased by Canso under the backstop commitment letter, the release noted.
Also, a minimum of C$25 million of convertibles will be purchased by Canso by way of private placement.
The company said it expects to offer up to C$10 million principal amount of convertible secured debentures to holders of its common shares under an offering of transferable rights. Canso has committed to purchase any convertibles not purchased by shareholders under the backstop commitment letter.
Proceeds will be used to repay the company's debt, including the company's 8% secured debentures due March 23, 2016 and its senior secured credit facilities, and to fund working capital.
The closing of the debenture private placements are expected to occur concurrently with the closing of the rights offering, and the closing of the private placements is a condition to the rights offering.
The company said it is in discussions with its senior lenders to further extend the maturity of the company's debt owing under its senior secured credit facilities from Jan. 31, 2016 in order to allow for the completion of the refinancing.
In connection with the proposed refinancing, Tuckamore said it has called a special meeting of its shareholders to be held on Feb. 19.
The Toronto company invests in Canadian private businesses.
| Issuer: | Tuckamore Capital Management Inc.
|
| Amount: | C$211,228,000
|
| Warrants: | No
|
| Pricing date: | Jan. 26
|
| Stock symbol: | Toronto: TX
|
| Stock price: | C$0.14 at close Jan. 25
|
| Market capitalization: | C$15.94 million
|
|
|
| Debentures
|
| Issue: | Senior secured debentures
|
| Amount: | C$176,228,000
|
| Maturity: | 2026
|
| Coupon: | 8%
|
| Investor: | Canso Investment Counsel Ltd. for at least C$130 million
|
|
|
| Convertible debentures
|
| Issue: | Second-lien secured convertible debentures
|
| Maturity: | 2026
|
| Amount: | C$35 million
|
| Coupon: | 10%
|
| Conversion price: | C$0.35
|
| Conversion premium: | 150%
|
| Investor: | Canso Investment Counsel Ltd. for at least C$25 million
|
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