CALGARY, Jan. 9, 2017 /CNW/ - Mosaic Capital
Corporation ("Mosaic") (TSX-V Symbols: M, M.PR.A and
M.DB) announced today that, further to Mosaic's news release
dated December 22, 2016 announcing
that Mosaic had entered into an agreement pursuant to which Fairfax
Financial Holdings Limited through certain of its subsidiaries has
agreed to invest $150,000,000 in
Mosaic on a private placement basis (the "Offering"), the
completion of the Offering is expected to occur in late
January 2017. Subject to the closing
of the Offering, all of Mosaic's outstanding 10% unsecured
subordinated perpetual preferred securities (the "10% Preferred
Securities") and series A preferred shares (the "Series A
Shares") will be redeemed on February
10, 2017 (the "Redemption Date") and all of Mosaic's
outstanding 9.25% private yield securities (the "Private Yield
Securities") will be retracted on the Redemption Date. Upon
completion of the retraction of the Private Yield Securities, all
outstanding warrants to purchase Private Yield Securities will
expire in accordance with their terms.
Applicable notices have been delivered to the trustees in
respect of the redemption of the 10% Preferred Securities and the
retraction of the Private Yield Securities.
On the Redemption Date, the following amounts will be payable by
Mosaic in respect of the redemption of the 10% Preferred Securities
and Series A Shares and the retraction of the Private Yield
Securities:
- $10.1096 for each $10 principal amount of 10% Preferred Securities
for an aggregate redemption cost of approximately $105 million;
- $1,010.137 for each $1,000 principal amount of Private Yield
Securities for an aggregate retraction cost of approximately
$26.5 million; and
- $10.1096 for each Series A Share
for an aggregate redemption cost of approximately $0.9 million.
Payment of the applicable redemption and retraction amounts for
the 10% Preferred Securities and Private Yield Securities will be
made to registered holders of such securities on or after the
Redemption Date upon surrender to the applicable trustee of the
certificates representing such securities. Payment of the
applicable redemption and retraction amounts will be made to
beneficial holders of the 10% Preferred Securities and Private
Yield Securities held with brokers and financial institutions who
are participants in CDS Clearing and Depository Services (CDS)
through such participants and will be governed by standing customer
instructions between the beneficial holder and the relevant
participant and by customary practices.
Liquidity Option for Holders of Convertible
Debentures
The closing price of Mosaic's outstanding 7% convertible
unsecured senior subordinated debentures (the "Debentures")
on the date Mosaic first announced the Offering, being December 22, 2016, was $99.00 per Debenture. Given that the most recent
closing price of the Debentures was $111.51, the board of directors of Mosaic has
determined that there would be little, if any, benefit to providing
the holders of Debentures with a liquidity option based on the
issue price of the Debentures plus accrued and unpaid interest (as
previously contemplated). Accordingly, Mosaic does not currently
intend to provide such a liquidity option for holders of the
Debentures.
ABOUT MOSAIC CAPITAL CORPORATION
Mosaic is a Canadian investment company that owns a portfolio of
established businesses which span a diverse range of industries and
geographies. Mosaic's strategy is to create long-term value for its
shareholders through accretive acquisitions, long-term portfolio
ownership, sustained cash flows and organic portfolio growth.
Mosaic achieves its objectives by maintaining financial discipline,
acquiring businesses at attractive valuations, performing extensive
acquisition due diligence, utilizing creative transaction
structuring and working closely with subsidiary businesses after
acquisition.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
FORWARD-LOOKING INFORMATION
This news release contains forward-looking information and
statements within the meaning of applicable Canadian securities
laws (herein referred to as "forward-looking statements") that
involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. All information and statements in this news
release which are not statements of historical fact may be
forward-looking statements. The words "believe", "expect",
"intend", "estimate", "anticipate", "project", "scheduled", and
similar expressions, as well as future or conditional verbs such as
"will", "should", "would", and "could" often identify
forward-looking statements. In particular, forward-looking
statements in this news release include, but are not limited to:
statements with respect to the timing and amount of payment for the
redemption of the 10% Preferred Securities and Series A Shares; the
timing and amount of payment for the retraction of the Private
Yield Securities; the anticipated closing date of the Offering; and
Mosaic's intention not to provide a liquidity option for holders of
the Debentures. Such statements or information are only predictions
and reflect the current beliefs of management with respect to
future events and are based on information currently available to
management. Actual results and events may differ materially
from those contemplated by these forward-looking statements due to
these statements being subject to a number of risks and
uncertainties.
Undue reliance should not be placed on these forward-looking
statements as there can be no assurance that the plans, intentions
or expectations upon which they are based will occur. By their
nature forward-looking statements involve assumptions and known and
unknown risks and uncertainties, both general and specific, that
contribute to the possibility that the predictions and other
forward-looking statements will not occur. Some of the assumptions
made by Mosaic, upon which such forward-looking statements are
based include, but are not limited to: the satisfactory timing and
receipt of the approval of the TSX Venture Exchange with respect to
the Offering; the successful completion of the Offering; future
market conditions will not be materially different than anticipated
by Mosaic; there will be no material changes to government and
environmental regulations affecting Mosaic or its operations; and
the business operations of the operating businesses of Mosaic will
continue on a basis consistent with prior years.
A number of factors could cause actual results to differ
materially from those expressed or implied by the forward-looking
statements, including, but not limited to: the inability to settle
definitive documentation and closing conditions of the Offering,
including accuracy of representations and warranties not being
satisfied; the inability to obtain approval from the TSX Venture
Exchange; prevailing economic conditions; unexpected changes in the
financial markets (including in the trading price of the securities
of Mosaic); and changes in the general economic and business
conditions of one or more of Mosaic and its subsidiaries. Should
any of the risks or uncertainties facing Mosaic and its
subsidiaries materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results,
performance, activities or achievements could vary materially from
those expressed or implied by any forward-looking statements
contained in this news release. Readers are cautioned that the
foregoing list of risks is not exhaustive. Additional information
on these and other factors that could affect the operations or
financial results of Mosaic and its subsidiaries are included in
Mosaic's annual information form for the year ended December 31, 2015, a copy of which is available
under Mosaic's profile on SEDAR (www.sedar.com).
Although Mosaic believes that the expectations represented by
any forward-looking statements contained herein are reasonable
based on the information available to it on the date of this news
release, management cannot assure investors that actual results,
performance or achievements will be consistent with these
forward-looking statements. Any forward-looking statements herein
contained are made as of the date of this news release and Mosaic
does not assume any obligation to update or revise them to reflect
new information, events or circumstances, except as required by
law.
SOURCE MOSAIC CAPITAL CORPORATION