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Colabor gets OK to extend convertibles, will increase interest rate
By Angela McDaniels
Tacoma, Wash., Aug. 22 – Colabor Group Inc. received holder approval to amend its C$50 million 5.7% convertible subordinated debentures due April 30, 2017, according to a company news release.
The company sought the amendments in connection with proposed recapitalization transactions meant to reduce its debt and enhance its capital structure.
The amendments will extend the maturity date to five years from the closing date of the recapitalization transactions, increase the interest rate to 6% from 5.7% as of Oct. 31 and reduce the conversion price to C$2.50 per common share from C$16.85.
The debentureholders voted at a meeting on Aug. 22. The holders of more than 97.75% of the principal amount of the convertibles present or represented at the meeting approved the amendments.
At a separate meeting on Aug. 22, the company’s shareholders approved a proposed C$50 million rights offering.
Of the proceeds of the rights offering, C$17.5 million will be used to reduce the company’s C$42.5 million subordinated loan and C$30 million will be used to pay down the company’s C$97.67 million senior credit facilities, which the company is also looking to extend by three years.
The completion of the recapitalization transactions is subject to customary closing conditions, including the effectiveness of amendments to the subordinated loan and senior credit facilities.
The company expects the close the recapitalization transactions in October after the completion of the rights offering and in any event no later than Nov. 30.
Colabor is a wholesaler and distributor of food and non-food products based in Boucherville, Quebec.
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