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Allen-Vanguard issues warrants to lending syndicate under terms of credit facility
OTTAWA, April 30 /CNW Telbec/ - Allen-Vanguard Corporation ("Allen-Vanguard" or the "Company") (T...
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[{"type":"text","content":"\n\n\n\nOTTAWA, April 30 /CNW Telbec/ - Allen-Vanguard Corporation\n("Allen-Vanguard" or the "Company") (TSX:VRS) today announced that in\naccordance with its amended and restated credit facilities entered into on\nDecember 29, 2008 (the "New Credit Facility"), the Company has elected to\nissue 16,496,000 warrants exercisable at $0.2114 per share for a period of\nfive years to certain members of its lending syndicate. All amounts are in\nCanadian dollars unless otherwise specified.\n\n\nUnder the terms of the New Credit Facility, as announced on December 29,\n2008 and as fully disclosed in Note 10 to the Financial Statements of\nAllen-Vanguard for the year ended September 30, 2008 and Information Circular\nfor its annual and special meeting held in March 2009, certain members of the\nlending syndicate were entitled to an additional cash payment from the Company\nbased on appreciation in the Company's share price over a five-year period\naccording to a pre-determined formula (the "Share Appreciation Right") unless\nthe Company reduced its long-term debt by US$50 million by April 30, 2009. In\nlieu of and in complete replacement of such Share Appreciation Right, the\nCompany had the option of issuing additional warrants (the "SAR Replacement\nWarrants") to certain of the lenders entitling them to acquire up to 10% of\nthe fully diluted common shares of the Company, subject to shareholder\napproval. At the Company's meeting of shareholders held on March 16, 2009, a\nmajority of disinterested shareholders of the Company approved the creation\nand issuance of the SAR Replacement Warrants.\n\n\nThe Company clarified that there was no requirement under the terms of\nthe credit facility to repay US$50 million of long-term debt by April 30,\n2009; but such a repayment would have avoided the issuance of these SAR\nReplacement Warrants.\n\n\nThe Company recently announced that it is continuing discussions on an\nexclusive basis with a U.S. equity investor group in a potential deal that\nwould significantly reduce the Company's long-term debt in a going-private\ntransaction.\n\n\nForward looking statements\n\n\nThis press release may contain forward-looking statements, which reflect\nAllen-Vanguard's current expectations regarding future events, its strategy,\nexpected performance and condit...