TORONTO, Sept. 29, 2015 /PRNewswire/ - Gran Colombia Gold
Corp. (the "Company") (TSX: GCM, OTC: TPRFF) announced today the
details for a comprehensive debt restructuring proposal that is to
be implemented pursuant to a Plan of Arrangement (the
"Arrangement") under the Business Corporations Act
(British Columbia) (the
"BCA").
The comprehensive debt restructuring will include:
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i.
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the exchange of the
US$100 million face value of 10.0% Secured Gold-Linked Notes due
2017 (the "Gold Notes") for Senior Secured Convertible PIK-Toggle
Debentures due 2020 (the "Secured Debentures") (the "Gold Notes
Exchange"); and
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ii.
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the exchange of the
US$78.6 million face value of 5.0% Senior Unsecured Silver-Linked
Notes due 2018 (the "Silver Notes") for Senior Unsecured
Convertible PIK-Toggle Debentures due 2022 (the "Unsecured
Debentures") (the "Silver Notes Exchange").
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The Company expects to hold meetings of holders of the Gold
Notes, the Silver Notes and the Company's common shares on or about
November 27, 2015 to approve the
Arrangement. If an Arrangement becomes impractical under the BCA,
the Company may instead complete a Plan of Arrangement or
Compromise under the Canadian Companies' Creditors Arrangement
Act.
The Company also intends to add three new independent members to
its Board of Directors. The Company's Compensation, Corporate
Governance and Nominating Committee is reviewing candidates and
will provide further information on nominees with the meeting
materials.
Upon the Arrangement becoming effective, all arrears of interest
on the Gold Notes and Silver Notes will be capitalized and included
in the face value of the Secured Debentures and Unsecured
Debentures, respectively, and will ultimately be paid on maturity
of the Secured Debentures and Unsecured Debentures, respectively.
Where such capitalization of arrears of interest would otherwise
result in a Secured Debenture or an Unsecured Debenture, as the
case may be, with a face value that is not an integral multiple of
$1,000, the face value of such
Secured Debenture or Unsecured Debenture will be rounded down to
the nearest $1,000.
Key terms of the Secured Debentures include:
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i.
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Holders will exchange
US$1,000 Gold Notes for US$1,000 Secured Debentures (prior to the
addition of interest in arrears on the Gold Notes).
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ii.
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The Secured
Debentures, at the option of the Company, will bear either (a) cash
interest at a rate of 3.00% per annum or (b) pay-in-kind interest
(or "PIK") at a rate of 4.00% per annum, in either case payable
monthly in arrears on the last business day of each month,
commencing in the first full calendar month following the date of
the exchange. For further certainty, the Company will be able to
elect between either a cash interest payment or a PIK interest
payment on a monthly basis. PIK interest will be added to the
principal amount of the Secured Debentures outstanding.
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iii.
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The Secured
Debentures will be convertible, at the option of the holder at any
time prior to the close of business on the earlier of the maturity
date and the last business day immediately preceding the date fixed
for redemption (the "Conversion Date"), at a conversion price of
US$0.30 per common share (the "Conversion Price") (before
giving effect to any PIK interest or payment of interest in shares,
this represents a conversion rate of approximately 3,333.33 common
shares per US$1,000 principal amount of Secured Debenture). The
Conversion Price shall be subject to standard provisions providing
for adjustments upon the occurrence of certain corporate
events.
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iv.
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The Secured
Debentures may be redeemed for cash in whole or in part from time
to time at the option of the Company on not more than 60 days and
not less than 30 days prior notice, at a price equal to their
principal amount (including any PIK principal increases) plus
accrued and unpaid interest.
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v.
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On maturity, provided
that no event of default shall have occurred and be continuing, the
Company may, at its option, on not more than 60 and not less than
30 days prior notice and subject to regulatory approval, elect to
satisfy its obligation to repay principal (including any PIK
principal increases) plus accrued and unpaid interest amounts of
the Secured Debentures by issuing and delivering that number of
freely tradeable common shares obtained by dividing the principal
plus accrued and unpaid interest amounts of the outstanding Secured
Debentures which have matured by 95% of the volume weighted average
trading price of the common shares on the TSX for the 20
consecutive trading days ending five trading days preceding the
Maturity Date.
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vi.
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The Secured
Debentures will be senior secured indebtedness of the Company. The
ranking of, and security for, the Secured Debentures are as set out
in the Gold Notes trust indenture. The covenants and events of
default are also as set out in the Gold Notes trust
indenture.
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vii.
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In addition to the
right of the Company to redeem the Secured Debentures, as set out
above, the Company will also have the right at any time to purchase
the Secured Debentures in the market, by tender, or by private
contract, at any price, which, for greater certainty, may be below
par.
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In addition to the above, the Company covenants that a minimum
of 75% of its Excess Cash Flow, as defined below, will be paid into
a sinking fund, which will be applied towards repayment, repurchase
(in the market, by tender, or by private contract, at any price,
which, for greater certainty, may be below par) or other
redemption, as the Company elects, of the Secured Debentures and
the Unsecured Debentures, with 2/3 and 1/3 of such sinking fund to
be used in respect thereof, respectively. "Excess Cash Flow" means
with respect to any fiscal quarter of the Company, consolidated
EBITDA for such fiscal quarter less capital, development and
exploration expenditures, cash payments of principal and interest
on debt, changes in non-cash working capital items and payment of
taxes and certain other existing financial obligations of the
Company.
Key terms of the Unsecured Debentures include:
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i.
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Holders will exchange
US$1,000 Silver Notes for US$1,000 Unsecured Debentures (prior to
the addition of interest in arrears on the Silver
Notes).
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ii.
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The Unsecured
Debentures, at the option of the Company, will bear either (a) cash
interest at a rate of 1.5% per annum or (b) pay-in-kind interest
(or "PIK") at a rate of 2.5% per annum, in either case payable
monthly in arrears on the last business day of each month,
commencing in the first full calendar month following the date of
the exchange. For further certainty, the Company will be able to
elect between either a cash interest payment or a PIK interest
payment on a monthly basis. PIK interest will be added to the
principal amount of the Unsecured Debentures
outstanding.
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iii.
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The Unsecured
Debentures will be convertible, at the option of the holder at any
time prior to the close of business on the earlier of the maturity
date and the last business day immediately preceding the date fixed
for redemption (the "Conversion Date"), at a conversion price of
US$0.25 per common share (the "Conversion Price") (before giving
effect to any PIK interest or payment of interest in shares, this
represents a conversion rate of approximately 4,000 common shares
per US$1,000 principal amount of Unsecured Debenture). The
Conversion Price shall be subject to standard provisions providing
for adjustments upon the occurrence of certain corporate
events.
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iv.
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The Unsecured
Debentures may be redeemed for cash in whole or in part from time
to time at the option of the Company on not more than 60 days and
not less than 30 days prior notice, at a price equal to their
principal amount (including any PIK principal increases) plus
accrued and unpaid interest.
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v.
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On maturity, provided
that no event of default shall have occurred and be continuing, the
Company may, at its option, on not more than 60 and not less than
30 days prior notice and subject to regulatory approval, elect to
satisfy its obligation to repay principal (including any PIK
principal increases) plus accrued and unpaid interest amounts of
the Unsecured Debentures by issuing and delivering that number of
freely tradeable common shares obtained by dividing the principal
plus accrued and unpaid interest amounts of the outstanding
Unsecured Debentures which have matured by 95% of the volume
weighted average trading price of the common shares on the TSX for
the 20 consecutive trading days ending five trading days preceding
the Maturity Date.
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vi.
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The Unsecured
Debentures will be unsecured indebtedness of the Company. The
covenants and events of default are also as set out in the Silver
Notes trust indenture.
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vii.
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In addition to the
right of the Company to redeem the Unsecured Debentures, as set out
above, the Company will also have the right at any time to purchase
the Unsecured Debentures in the market, by tender, or by private
contract, at any price, which, for greater certainty, may be below
par.
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The Excess Cash Flow covenant outlined above will also apply to
the Unsecured Debentures as described.
The Company will be providing additional information regarding
the forthcoming meetings to holders of the Gold Notes, Silver Notes
and common shares in due course. The Arrangement is subject to
certain conditions including, but not limited to, the receipt of
all necessary regulatory and stock exchange approvals including the
receipt of approval by the Toronto Stock Exchange. Terms outlined
herein may be amended as required to receive such approvals.
About Gran Colombia Gold Corp.
Gran Colombia is a
Canadian-based gold and silver exploration, development and
production company with its primary focus in Colombia. Gran Colombia is currently the largest underground
gold and silver producer in Colombia with several underground mines in
operation at its Segovia and Marmato Operations. Gran Colombia is currently advancing a project to
develop a modern, large-scale, gold and silver mine at its Segovia
operations.
Additional information on Gran Colombia can be found on its
website at www.grancolombiagold.com and by reviewing its profile on
SEDAR at www.sedar.com.
Cautionary Statement on Forward-Looking Information:
This news release contains "forward-looking information",
which may include, but is not limited to, the proposed terms of the
debt restructuring proposal and the expected timing for the
meetings of the Gold Notes, the Silver Notes and the Company's
common shares. Often, but not always, forward-looking statements
can be identified by the use of words such as "plans", "expects",
"is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", or "believes" or variations (including
negative variations) of such words and phrases, or state that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of Gran Colombia to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements. Factors that could cause actual
results to differ materially from those anticipated in these
forward-looking statements are described under the caption "Risk
Factors" in the Company's Annual Information Form dated as of
March 31, 2015, which is available
for view on SEDAR at www.sedar.com. Forward-looking statements
contained herein are made as of the date of this press release and
Gran Colombia disclaims, other than as required by law, any
obligation to update any forward-looking statements whether as a
result of new information, results, future events, circumstances,
or if management's estimates or opinions should change, or
otherwise. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, the reader is cautioned not to place undue
reliance on forward-looking statements.
SOURCE Gran Colombia Gold Corp.