Business
Jaguar believes directors of Canadian Royalties are acting coercively in integrating removal of the 101% debenture principal amount payment with the Jien Offer
Jaguar believes directors of Canadian Royalties are acting coercively in integrating removal of t...
About this update from Cleghorn Minerals Ltd.
[{"type":"text","content":"\n\n\n\nOct. 22, 2009 (Canada NewsWire Group) -- TORONTO, Oct. 22 /CNW/ -- Jaguar Financial Corporation (TSX: JFC) (\"Jaguar\" or the \"Company\") today criticized the directors of Canadian Royalties Inc. (\"Canadian Royalties\" or \"CZZ\") for supporting the offer by Jien Mining Canada Ltd. (\"Jien\") to remove the contractual right of Debenture holders to receive 101% of the principal amount on a change of control.Coercive and Oppressive Conduct - Integration of the Jien Offer andRemoval of the 101% PaymentThe Indenture governing the rights of Debenture holders is clear in recognizing two separate transactions. The first transaction is a change in control of CZZ which is the purchase by an acquiror of two-thirds or more of the issued common shares of CZZ. Upon that occurrence a second transaction must occur under the Indenture which is an offer by CZZ within 30 days of the change in control to acquire the Debentures at a price equal to 101% of the principal amount of the Debentures plus accrued interest.When Jien made its original offer (\"Original Offer\") to purchase the common shares of CZZ at $0.60 per share and the Debentures at $0.60 on the dollar, the CZZ Board rejected the Original Offer for various reasons including, most importantly from the point of view of the Debenture holders, the following reason disclosed in CZZ's press release dated August 25, 2009:\"The Debenture indenture requires payment of 101% to holders of theDebentures in the event of a change in control.\"In addition, the Directors Circular of CZZ dated August 25 stated thefollowing:\"7. The Debenture indenture requires payment of 101% of principal toDebentureholders in the event of a change in controlUnder the Debenture Offer, Jien is offering only $600 cash per $1,000 principal amount of Debentures (i.e. only 60% of the principal amount), plus accrued and unpaid interest up to, but excluding, the date the Debentures are taken up under the Debenture Offer. However, the indenture governing the Debentures provides that on a change of control an offer must be commenced to purchase the Debentures at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest thereon (if any). The Debenture Offer is at a significant discount to the payment Jien would be required to make to the holders of the Debentures upon a change of ...