Business
Jaguar calls for payment of $1,010 per $1,000 principal amount of debentures as required under the Canadian Royalties Indenture
Jaguar calls for payment of $1,010 per $1,000 principal amount of debentures as required under th...
About this update from Cleghorn Minerals Ltd.
[{"type":"text","content":"\n\n\n\nOct. 21, 2009 (Canada NewsWire Group) -- TORONTO, Oct. 21 /CNW/ -- Jaguar Financial Corporation (TSX: JFC) (\"Jaguar\" or the \"Company\"), announced today on behalf of certain holders which include Jaguar of 7% convertible debentures due March 31, 2015 (the \"Debentures\") issued by Canadian Royalties Inc. (\"Canadian Royalties\" or \"CZZ\"), its opposition to the offer (the \"Jien Offer\") made by Jien Canada Mining Ltd. (and certain other companies) (collectively \"Jien\"), as revised on October 16, 2009, to acquire all of the common shares of Canadian Royalties for $0.80 per share and all of the Debentures for $800 per $1,000 of principal amount of Debenture (the \"Jien Offer\").Jaguar believes, as a fundamental principle, that creditors should receive full recovery of their entire principal amount, plus the premium of 1% as required under the Indenture between CZZ and the Indenture Trustee as a result of the proposed change in control, prior to any payment being made to common shareholders in the Jien Offer. Jaguar considers it oppressive that Jien has not respected the basic priority of creditors over common shareholders of CZZ in the Jien Offer.CZZ was not able to raise sufficient capital to put the Nunavik nickel project into production and accordingly the project has been placed on care and maintenance. CZZ is estimated to have about $20 million in cash resources which would cover interest payments on the Debentures and operating expenses for approximately a one year period. In the absence of a significant capital injection, Jaguar believes Canadian Royalties would likely become insolvent at the end of this one year period.If CZZ were to obtain creditor protection under the Companies Creditors Arrangement Act, the shareholders would receive nothing and Jaguar believes the holders of Debentures would receive 100 cents on the dollar for their Debentures from the proceeds of the sale of the Nunavik project. If the Nunavik sale proceeds exceed the total amount owing under the Debentures, the recovery by the shareholders would not be expected to be anywhere close to $81.6 million or $0.80 per share, and any recovery to the shareholders, as limited as it would be, would clearly be after full recovery by holders of the Debentures.Vic Alboini, Chairman and Chief Executive Officer of Jaguar stated: \"We do not believe th...