Aston Hill aims to amend, extend 6% convertibles; redemption planned

By Susanna Moon

Chicago, Sept. 24 – Aston Hill Financial Inc. said it is seeking noteholder approval to amend its C$40 million of outstanding 6% extendible convertible unsecured subordinated debentures due July 31, 2016.

A noteholder meeting has been set for Oct. 29.

The company is proposing the following amendments:

• To extend the convertibles until Jan. 31, 2019 from July 31, 2016;

• To cut the conversion price to C$0.65 per share from C$2.55 per share;

• To lift the coupon to 6.5% from 6%; and

• To restrict the company from exercising its right to redeem any debentures until July 31, 2017, other than the partial redemption laid out below.

The conversion price reduction, along with extended maturity, allow for a higher probability that the company’s common shares will rise above the conversion price, according to a company press release.

The proposed changes provide “an important step in restructuring, enhancing and strengthening the company's balance sheet and providing the company additional time to execute its business plan,” the release said.

Notes redemption, other terms

In conjunction with the proposed amendments, Aston Hill said it intends to exercise its right to redeem about C$6 million principal amount of debentures in cash on a pro rata basis.

The redemption price will be par plus accrued interest up to but excluding the redemption date.

To pass, the company must secure votes from at least two-thirds of those represented at the meeting or consents in writing from holders of at least two-thirds of the outstanding notes.

After the notes are redeemed, there will be about C$34 million principal amount of the notes left outstanding.

The board has unanimously recommended that holders vote for or consent to the proposed amendments, the release added.

Aston Hill is a diversified asset management company with offices in Toronto and Halifax, N.S.

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