Business
Liberty Mines Announces Funding of 2011 Business Plan and Financial Re-Engineering
Jan. 10, 2011 (Filing Services Canada) -- Liberty Mines Inc. (LBE - TSX), ("Liberty" or the "Co...
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[{"type":"text","content":"\nLiberty Mines Announces Funding of 2011 Business Plan and Financial Re-Engineering\n\n\n Jan. 10, 2011 (Filing Services Canada) -- Liberty Mines Inc. (LBE - TSX), (\"Liberty\" or the \"Company\") announced today that it has entered into a Memorandum of Understanding (the \"MOU\") with Jilin Jien (together with its related parties, \"Jien\"), its majority shareholder, that provides funding to support the Company's 2011 business plan and a comprehensive financial re-engineering proposal intended to create a better capital structure for Liberty and to substantially reduce dilution risk to its minority shareholders.In order to fund Liberty's 2011 business plan, Jien is advancing a further $8.0 million to the Company, to be provided in tranches that begin immediately and that are intended to be complete in Q2 2011.As part of the proposed financial re-engineering, Jien and Liberty have agreed in principal: 1. To consolidate all of Jien's outstanding debt instruments, including promissory notes, credit facility, advances and accrued interest, and the $8.0 million in new advances contemplated in the MOU, totaling approximately $49.0 million as at December 31, 2010, into two secured term loans maturing 18 months and 36 months after the closing of the proposed transaction, respectively.  The interest rates on the two term loans will be 10% per annum.  In the first 18 months, all interest will be capitalized to lessen the cash requirements of the Company.2. That Jien will convert 38,098,908 Preferred Shares of Liberty to Common Shares, at the current conversion ratio of 1:1.  This conversion will increase Jien's common share ownership of Liberty from 51% to 60%.  Jien agrees not to convert any further Preferred Shares of Liberty.3. That the terms of the remaining 148,895,602 Preferred Shares not converted pursuant to 2, above, shall be amended such that the right to convert to common shares will be cancelled.  In consideration, Jien will be granted an option to cause Liberty to redeem the remaining Preferred Shares, such redemption, if occurring in the first 24 months following the closing of the proposed transaction, to be funded by increasing the amount of one of the two secured term loans referenced in 1, above, so as to lessen the cash requirements of the Company.4. That Jien will be ...