Clarke announces proposal to amend Debentures

About this update from Clarke Inc.

[{"type":"text","content":"\n\n\nHALIFAX, Nov. 14, 2013 /CNW/ - Clarke Inc. (\"Clarke\" or the \"Company\")\n (TSX: CKI CKI.DB.A) announced today that it intends to seek the\n approval of the holders (\"Debentureholders\") of its 6.00% convertible\n unsecured subordinated debentures due December 31, 2018 (the\n \"Debentures\") to amend the terms of the Debentures at a meeting to be\n held on December 20, 2013 (the \"Meeting\").\n\n\nThe proposed amendments to the Debentures (the \"Proposed Amendments\")\n consist of:\n\n\nINCREASING the interest rate on the Debentures from 6.00% to 6.50%.\n\n\nELIMINATING the ability of the Debentureholders to convert the\n Debentures into common shares of the Company.\n\n\n\n\n\nClarke believes the Proposed Amendments have the following advantages:\n\n\nIncreased interest rate.  Clarke believes that increasing the interest rate on the Debentures\n from 6.00% to 6.50% represents an attractive opportunity for\n Debentureholders to generate additional interest income, especially in\n the current low interest rate environment, and in light of other\n reinvestment opportunities available.\n\n\nConsent fee.  Debentureholders that vote in favour of the proposed amendments will\n receive a consent fee of 25 basis points or $2.50 per $1000 principal\n amount of Debentures and brokers will receive a broker fee of 75 basis\n points or $7.50 per $1000 principal amount of Debentures.\n\n\n\n\n\nClarke has the financial capacity to redeem the Debentures at this time.\n Clarke believes that doing so would result in Debentureholders losing\n an attractive and recurring source of income.  Clarke currently has\n cash availability and marketable securities in excess of $135 million. \n Clarke is permitted to draw down on its credit facilities and use the\n proceeds of such facilities for general corporate purposes, including\n redemption of the Debentures. The interest rates on such facilities are\n substantially lower than the proposed increased interest rate on the\n Debentures.\n\n\nClarke continuously evaluates and seeks to optimize the Company's\n capital structure. Clarke's objective in this regard is to ensure that\n the Company maintains its flexibility to pursue its investment strategy\n and to continue to build value for all stakeholders. The proposed\n amendments to the Debentures achieve these obje...

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