Clarke Provides Clarification on its Proposed Debentures Amendments

About this update from Clarke Inc.

[{"type":"text","content":"\n\n\nHALIFAX, Dec. 2, 2013 /CNW/ - Clarke Inc. (\"Clarke\" or the \"Company\")\n (TSX: CKI CKI.DB.A) is providing the following clarification regarding\n the recently announced proposed amendments (the \"Proposed Amendments\")\n to its 6.00% convertible unsecured subordinated debentures due December\n 31, 2018 (the \"Debentures\").\n\n\nClarke continuously evaluates and seeks to optimize the Company's\n capital structure for the benefit of all its stakeholders.\n\n\nClarke currently has cash availability and marketable securities in\n excess of $150 million and expects to generate further net cash\n proceeds in excess of $85 million through the sale of its freight\n division by the end of the current calendar year. This provides the\n Company with the financial capacity to redeem all of the $62 million of\n Debentures outstanding at any time as permitted under the terms of the\n indenture at a price equal to the principal amount and all accrued and\n unpaid interest thereon to but excluding the date of redemption. The\n interest rates on the cash available to Clarke through its credit\n facilities are substantially lower than the proposed increased interest\n rate on the Debentures contemplated by the Proposed Amendments.\n\n\nClarke believes that redeeming the Debentures now would result in\n Debentureholders losing a premium trading security in the market today\n and an attractive and recurring source of future income.\n\n\nThe advantages to the Debentureholders of the proposed amendments\n include the following:\n\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 which is\n attractive in the current low interest rate environment and in light of\n other 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\nAvoid Redemption. Avoid redemption of the Debentures and losing an attractive and\n recurring source of income.\n\n\n\nThe details of the proposed amendment are outlined in the mana...

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