Business
Garneau Inc. announces alternate financing arrangement
Garneau Inc. announces alternate financing arrangement
About this update from Green Arrow Resources, Inc.
[{"type":"text","content":"\n\n\n\n Jul. 2, 2010 (Canada NewsWire Group) -- NEX - GAR.H\n\n Garneau Inc. ("Garneau" or the "Corporation") (GAR.H: NEX) On July 2, 2010 the Corporation announced that it had executed a term sheet (the "Term Sheet") with certain affiliates of a major shareholder (the "Lender") pursuant to which the Corporation is to enter into an alternative form of financing, which would result in the payment in full of all outstanding amounts owing to the Corporation's senior secured lender under its credit facility. In connection with the new plan, the Lender has agreed to provide up to $3.6 million in new financing (the "New Facility"). The Term Sheet describes some of the basic terms of the New Facility, which will be subject to the terms contained in definitive loan documentation.\nPursuant to the Term Sheet, the New Facility is to have a term of two (2) years, and interest accrued at a rate of (9%) percent (the "Base Rate") on all unpaid principal would be payable monthly. Beginning six (6) months following closing, principal repayment in the amount of $25,000.00 is to be paid in monthly installments. Garneau may, however, without notice, permanently prepay amounts outstanding under the New Facility in whole or in part at any time at its discretion, without penalty.\nThe fees associated with the new facility are as follows:\n\n\n >\n\n\nThe New Facility is to be secured by way of a first mortgage on the real property of the Corporation. Pursuant to the Term Sheet, the proceeds of the New Facility are to be used by the Corporation as follows:\n\n\n >\n\n\nEntering into the New Facility resulted from the process undertaken by the board of directors of the Corporation (the "Board") in the Board's continuing efforts to preserve shareholder value. The Board will continue in its review of strategic alternatives for Garneau.\nDue to the Lender's interest in the New Facility, the entering into of the New Facility is a related party transaction pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Corporation is relying on the financial hardship exemption from the valuation and minority approval requirements of MI 61-101. Specifically, pursuant to subsection 5.5(g) and 5.7(e) of MI 61-101, a f...