Gran Colombia Gold Receives Requisite Securityholder Approval and Consents and Expects to Close Previously Announced Debt Financing on April 30, 2018
TORONTO, April 20, 2018 (GLOBE NEWSWIRE) -- Gran Colombia Gold Corp. (the “Company” or “Gran Colombia”) (TSX:GCM) announced today the positive results of the Company’s special meeting of shareholders (the “Special Meeting”) and consent solicitations related to its previously announced proposed debt financing (the “Offering”). With the requisite securityholder approval and consents now received, the Company expects to complete the closing of the Offering on April 30, 2018.
Serafino Iacono, Executive Co-Chairman of Gran Colombia, commented, “We received a significant amount of interest in the Offering, and to accommodate investors, including existing holders of the Company’s Senior Secured Convertible Debentures due 2020 and 2024 (collectively, the “Senior Debentures”) who wished to roll over their positions into the Offering, we have increased the size of the Offering to up to 98,000 Units for aggregate gross proceeds of up to US$98 million, maintaining our objective of keeping a tighter level of debt on our balance sheet. This will enable us to fully redeem the Senior Debentures at par as planned. Any remaining cash proceeds will be used for general corporate purposes. We have now received the requisite shareholder approval and the requisite consent of holders of the Company’s Senior Unsecured Convertible Debentures due August 2018 (the “2018 Debentures”) to proceed with the Offering. We have also received the requisite consent of the holders of the Senior Debentures to amend the 2020 and 2024 Indenture (as defined below) to eliminate the requirement to give advanced notice prior to early redemption, allowing us to redeem the Senior Debentures in full shortly after the closing of the Offering, which has now been set for April 30, 2018.”
Special Meeting of Shareholders
The detailed result of the Special Meeting which took place on Thursday, April 19, 2018 is set out below:
|Description of Matter||Outcome||Voted||Voted (%)|
|Approval of an ordinary resolution, the full text of which is set forth in Schedule A of the management information circular dated February 22, 2018, as supplemented, to approve the proposed financing of up to 152,000 units of the Company, each unit consisting of US$1,000 principal amount of senior secured gold-linked notes due 2024 and 124 common share purchase warrants of the Company, pursuant to a private placement, all as more specifically set out in the management information circular dated February 22, 2018, as supplemented.||Approved||4,851,655 For
2018 Debenture Consent Solicitation and Cancellation of Meeting
The holders of 85.30% of the total aggregate principal amount of outstanding 2018 Debentures have provided their consent for the amendment of the Amended and Restated Indenture dated as of August 11, 2011 (as amended and restated as of January 20, 2016) governing the 2018 Debentures to permit the Offering. The Company will increase the annual interest rate on the 2018 Debentures from 1% to 5% effective April 30, 2018, the expected closing date of the Offering, through to the maturity of the 2018 Debentures in August. As such, the previously announced meeting of 2018 Debenture holders scheduled to take place on April 27, 2018 to consider this matter has been cancelled.
In addition, holders of US$7,260,659 aggregate principal amount of 2018 Debentures have elected to exchange their 2018 Debentures at the closing of the Offering for a cash payment equal to 19% of the principal amount of their 2018 Debentures and the remaining 81% of the principal amount settled with Common Shares, a total of approximately 3,015,966 Common Shares based on the conversion price of US$1.95 per Common Share.
Senior Debenture Consent Solicitation
The holders of 76.48% of the total aggregate principal amount of outstanding Senior Debentures have provided their consent for the amendment of the Amended and Restated Indenture dated as of October 30, 2012 (as amended and restated as of January 20, 2016), and as supplemented by a Supplemental Indenture dated as of May 12, 2017 (the “2020 and 2024 Indenture”) governing the Senior Debentures to remove the requirement to give advanced notice for the early redemption of the debt, to allow the Company to expedite the redemption of the Senior Debentures shortly after the closing of the Offering. Holders of the Senior Debentures who have previously indicated their intention to participate in the Offering will exchange their existing Senior Debentures to the Units of the Offering at a rate of 1 Unit for every US$1,000 principal amount of Senior Debentures.
The terms of the Offering remain substantially the same as those disclosed in the Company’s press release dated March 22, 2018. As a result of increasing the size of the Offering to US$98 million, the only term that changed from previous disclosure is the number of physical gold ounces that will be placed into the gold trust account, now ranging from 15,600 ounces in the first and second years down to 10,000 ounces in the final year of the six-year term of the new senior secured gold-linked notes. In addition, the total number of warrants issuable pursuant to the Offering has increased to 12.15 million.
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 continuing to focus on exploration, expansion and modernization activities at its high-grade Segovia Operations.
Cautionary Statement on Forward-Looking Information:
This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the Offering, including the expected timing for closing of the Offering, the expected use of proceeds from the Offering, the redemption of the Senior Debentures, the anticipated impact of the Offering on the Company’s balance sheet and anticipated business plans or strategies. 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 27, 2018, 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.
For Further Information, Contact:
Chief Financial Officer