Business
Fareport Capital Inc. Announces Proposed Financing and Debt Restructuring
Fareport Capital Inc. Announces Proposed Financing and Debt Restructuring.
About this update from Falco Resources Ltd.
[{"type":"text","content":"\n\n\n\n\nTORONTO, Sept. 25 /CNW/ - Fareport Capital Inc. (TSX-V: CAB) (\"Fareport\")\ntoday announced that it proposes to restructure its affairs, settle\noutstanding litigation, complete a conversion of substantially all of its\ncurrent debt obligations, a consolidation of its issued and outstanding common\nshares and a private placement financing of its common shares, all subject to\nshareholder and regulatory approval.\nFareport proposes to enter into a financing transaction with an investor\n(the \"Investor\") whereby the Investor will make a $2,800,000 commitment to\nacquire certain existing debt and new common shares of Fareport. Specifically,\nthe Investor will first advance Fareport $200,000 by way of an unsecured\nsubordinated loan bearing interest at 12% per annum, evidenced by a\nconvertible promissory note, to be used as working capital (the \"Advance\").\nNext, the Investor will acquire from current holders certain pre-existing\ndebentures, promissory notes and other indebtedness of Fareport having a face\nvalue (including principal and interest) of approximately $3,076,083.64 (the\n\"Prior Loans\"). Fareport then proposes to complete a 100:1 share\nconsolidation, following which the Prior Loans will be converted into common\nshares of Fareport, as described below. The Investor will then purchase\napproximately $1,130,838 worth of common shares of Fareport issued from\ntreasury at the Conversion Price (defined below). It is anticipated that the\nInvestor will instruct Fareport to register the shares issuable upon the\nconversion of the Prior Loans in the names of certain shareholders of the\nInvestor. Finally, Fareport proposes to create and issue to the Investor\n$100,000 worth of first convertible preferred shares such that the Investor\nwill, after those preferred shares are converted into common shares, own for\nits own account 60% of the issued and outstanding common shares of Fareport.\nAs a result of the transactions, the Investor would become the controlling\nshareholder of Fareport. The terms of the transaction have been set out in a\nbinding commitment letter and term sheet (the \"Commitment Letter\"), which, it\nis anticipated, will be superceded by definitive detailed documentation.\nPursuant to the Commitment Letter, Fareport will seek the agreement of\nthe creditors under the Prior Loans to settle, in...