First Bauxite Corporation Announces Re-Financing of Convertible Notes
June 26 2014 - 4:30PM
Marketwired
First Bauxite Corporation Announces Re-Financing of Convertible
Notes
TORONTO, ONTARIO--(Marketwired - Jun 26, 2014) - First Bauxite
Corporation (TSX-VENTURE:FBX)(FRANKFURT:FBI)(BERLIN:FBI)(the
"Company") is pleased to announce that the Company has completed a
re-financing of its $8 million principal amount convertible notes
previously issued to the Pacific Road Resources Funds by the
issuance of replacement 10% per annum interest bearing promissory
notes (the "Replacement Notes") and the cancellation of the
convertible notes previously issued to Pacific Road.
The non-convertible Replacement Notes have an aggregate
principal amount of $8,313,000, reflecting the $8 million in
cancelled notes, a $280,000 (3.5%) re-financing fee and $33,000 in
legal costs incurred by Pacific Road on the re-financing. The
Replacement Notes mature in January 2016, therefore are considered
a non-current liability of the Company. The cancellation of the
previously issued notes to Pacific Road leaves the Company in a
positive net working capital position.
The Re-financing constitutes a related party transaction
pursuant to Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions ("MI
61-101") and TSX Venture Exchange Policy 5.9.
The board of the Company consists of six directors, five of whom
are unrelated to PRRF and its affiliates, and are otherwise
independent as determined pursuant to Part 7 of MI 61-101. The
directors reviewed the Company's financial position as advised by
the Chief Financial Officer of the Company, including giving
consideration to its net working capital deficiency, the June 26,
2014 maturity date of $3,000,000 in convertible notes and the July
23, 2014 maturity date of $5,000,000 in convertible notes. In the
event of default in payment on the notes due in June and July 2014,
accelerated default provisions would have triggered the obligation
to pay an additional $8,000,000 of convertible notes which were
previously issued and are also due in January 2016.
In light of the financial situation of the Company, the
directors of the Company considered the terms of the Re-financing
and the financial status of the Company and resolved unanimously
that the Company was in serious financial difficulty; that the
Re-financing was designed to improve the Company's financial
position and the Re-financing and the terms thereof were reasonable
in the circumstances of the Company. The Re-financing was then
unanimously authorized and approved by the independent
directors.
In consideration of the financial circumstances of the Company
and the determination by the directors, the Company relied upon the
"financial hardship" exemptions from the requirements to obtain a
formal valuation and minority shareholder approval in Sections
5.5(g) and 5.7(e) of MI 61-101 respectively.
The Company is also filing a material change report on SEDAR
(www.sedar.com) regarding the Re-financing. The material change
report is being filed less than 21 days prior to the closing of the
Re-financing due to the short time span between the signing of the
amending agreement today and the maturity dates of the previously
issued convertible debentures being re-financed by the Replacement
Notes.
About First Bauxite Corporation
First Bauxite Corporation (TSX-VENTURE:FBX) is a Canadian
natural resource company engaged in the exploration and development
of bauxite deposits in Guyana, South America. The Company has its
head office in Toronto and is managed by experienced geoscientists
and business development professionals with worldwide experience in
the exploration and mining business across a number of mineral
commodities. The mission of the Company is to become a near term,
medium size producer and supplier of high quality refractory grade
sintered bauxite. For further information on First Bauxite
Corporation, please visit our corporate website at
www.firstbauxite.com.
Forward-Looking Statements
Certain statements contained herein constitute "forward-looking
statements". Forward-looking statements look into the future and
provide an opinion as to the effect of certain events and trends on
the business. These forward-looking statements are based on current
expectations and entail various risks and uncertainties. Actual
results may materially differ from expectations, if known and
unknown risks or uncertainties affect our business, or if our
estimates or assumptions prove inaccurate. Factors that could cause
results or events to differ materially from current expectations
expressed or implied by the forward-looking statements, include,
but are not limited to, the effect of capital market conditions and
other factors on capital availability. Readers are cautioned not to
place undue reliance on the forward-looking statements contained in
this press release. Except as required by law, the Company assumes
no obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or any other
reason.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
First Bauxite CorporationHilbert N. ShieldsPresident &
CEO416-613-0910www.firstbauxite.com
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