CMQ announces details of private placement financing and extension of forbearance
16 Ottobre 2011 - 7:09AM
PR Newswire (Canada)
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES/ CALGARY, Oct. 19, 2011 /CNW/ -
CMQ Resources Inc. ("CMQ") announced today that it intends to
complete a private placement (the "Offering") of approximately
$1,500,000 principal amount of secured convertible debentures to
Matco Investments Ltd. ("Matco"), CMQ's principal creditor and
shareholder and a control person of CMQ. The Offering will consist
of the issuance of $1,500,000 principal amount of convertible
debentures (the "Debentures") secured against all present and after
acquired property of CMQ on similar terms to CMQ's existing secured
indebtedness owing to Matco. The Debentures shall have a
maturity date of October 15, 2013 and bear interest at a rate equal
to 9% per annum. The accrued principal and interest amounts
owing on the Debentures shall be convertible, at Matco's election,
into common shares of CMQ at a price equal to $0.10 per common
share. It is currently anticipated that Matco will be the
only subscriber to the Offering. Matco and related persons
currently hold 22,094,141 common shares of CMQ, representing 49.99%
of CMQ's outstanding common shares and would hold 37,094,141 common
shares of CMQ, representing 63% of CMQ's outstanding common shares
if the full principal amount of the Debentures were to be
converted. In CMQ's information circular relating to the annual and
special meeting of shareholders of CMQ held on June 21, 2011 (the
"Meeting"), CMQ disclosed that it intended to enter into a future
financing which may involve Matco acquiring up to 90% of the issued
and outstanding shares of the Corporation. At the Meeting,
shareholders of CMQ approved, both on a majority basis and on a
"majority of the minority" basis, a resolution approving such
financing and Matco's participation therein to become a de facto
control person of CMQ in accordance with Multilateral Instrument
61-101 ("MI 61-101"). In connection with the Offering, CMQ is
relying upon the exemption set forth in section 5.5(c) of MI 61-101
which allows an issuer to forego receiving a formal valuation in
respect of a related party transaction. There have been no
prior valuations of CMQ, its material assets or its securities made
in the twenty four months preceding the date hereof. On December
19, 2010, CMQ entered into a funding and forbearance agreement with
Matco, pursuant to which Matco agreed that it would, for a period
ending on October 19, 2011, forbear from enforcing its rights and
remedies against the Corporation (the "Forbearance") in respect of
substantially all amounts CMQ was indebted to Matco. In
connection with the Offering, CMQ and Matco have entered into an
agreement to extend the Forbearance previously granted by Matco to
May 30, 2012, conditional on completion of the Offering on or prior
to November 30, 2011, and for no additional consideration. The net
proceeds of the Offering will be used principally for working
capital purposes. The terms of the Offering and the extended
forbearance were negotiated between Matco and an independent
committee of CMQ's board of directors consisting of independent
directors of CMQ, free from any interest in the Offering, which has
recommended proceeding with the Offering and forbearance
extension. The completion of the Offering remains subject to
receipt of all required regulatory approvals not previously
obtained, including that of the TSX Venture Exchange. This press
release is not an offer to sell securities in the United
States. Securities may not be offered or sold in the United
States in the absence of registration or an exemption from
registration. The Exchange does not accept responsibility for the
adequacy or accuracy of this release. Forward-Looking Statements
This press release contains certain forward-looking statements and
forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of Canadian
securities laws including with respect to the timing, completion of
and terms of the Offering. All statements other than statements of
historical fact are forward-looking statements. Forward-looking
statements typically contain statements with words such as
"anticipate", "believe", "plan", "continuous", "estimate",
"expect", "intend", "may", "will", "shall", "project", "would",
"should", or similar words suggesting future outcomes. Undue
reliance should not be placed on forward-looking statements, which
are inherently uncertain, are based on estimates and assumptions,
and are subject to known and unknown risks and uncertainties (both
general and specific) that contribute to the possibility that the
future events or circumstances contemplated by the forward-looking
statements will not occur. There can be no assurance that the
plans, intentions or expectations upon which forward-looking
statements are based will in fact be realized. Actual results will
differ, and the difference may be material and adverse to CMQ and
shareholders. Forward-looking statements are based on management's
current beliefs as well as assumptions made by, and information
currently available to, management. Though management considers
these assumptions to be reasonable based on information currently
available to it, they may prove to be incorrect. By their very
nature, forward-looking statements involve inherent risks and
uncertainties, both general and specific, and risks that
forward-looking statements will not be achieved. The
forward-looking statements contained in this press release are made
as of the date hereof and CMQ does not undertake any obligation to
update publicly or to revise any of the included forward-looking
statements, except as required by applicable law. The
forward-looking statements contained herein are expressly qualified
by this cautionary statement. CMQ Resources Inc. CONTACT: Ryan
Jennings, Corporate Secretary, CMQ Resources Inc.,
Tel:(403)294-6496
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