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Magellan Aerospace Corporation announces financing for payment of convertible debentures on maturity
TORONTO, Dec. 20 /CNW/ - Magellan Aerospace Corporation ("Magellan" or the "Corporation") announc...
About this update from Magellan Aerospace Corporation
[{"type":"text","content":"\n\n\n\nTORONTO, Dec. 20 /CNW/ - Magellan Aerospace Corporation ("Magellan" or\nthe "Corporation") announced today that the independent members of the board\nof directors had approved proposed financing arrangements to pay the currently\noutstanding principal amount of approximately $70 million of 8.5% unsecured\nsubordinated debentures (the "Existing Debentures") in cash on the maturity\ndate of January 31, 2008.\n\n\nMagellan announced a proposed private placement of $35 million aggregate\nprincipal amount of 8.5% convertible unsecured subordinated debentures due\nJanuary 31, 2010 to fund, in part, the payments on maturity of the Existing\nDebentures. Under the proposed terms, for the first six months of the term,\nMagellan may redeem the debentures at 102.5% of principal value and the\nholders have no conversion rights. After the first six months of the term, the\ndebentures would be convertible, at the option of the holder, at any time\nprior to maturity into common shares of Magellan at a conversion price of\n$2.00 per share, which is equal to a conversion rate of 500 common shares per\n$1,000 principal amount of debentures or the issuance on conversion of\napproximately 17,500,000 common shares in total. Magellan's principal\nshareholder, N. Murray Edwards of Calgary, Alberta, has agreed to purchase,\ndirectly or indirectly, $17.5 million principal amount of the debentures. Mr.\nEdwards indicated the acquisition of the debentures is for investment purposes\nand Mr. Edwards may, directly or indirectly, acquire additional securities of\nMagellan depending on market conditions. If the debentures were converted, Mr.\nEdwards would acquire an additional 8,750,000 common shares representing an\nadditional 8.1% of the issued and outstanding common shares of Magellan after\nconversion of all of the debentures. Mr. Edwards currently owns, directly or\nindirectly, approximately 28% of the issued common shares of Magellan,\n$15,000,000 of the principal amount of the Existing Debentures (convertible at\n$4.50 per share) and 1,005,000 First Preferred Shares (principal amount of\n$10,050,000 is convertible at $3.00 per share). It is presently proposed that\nthe remaining $17.5 million principal amount of the debentures will be placed\nwith other investors.\n\n\nIn order to fund the remaining payment of $35 ...