49 North gets OK at meeting to restructure 9% convertibles due 2017

By Toni Weeks

San Luis Obispo, Calif., May 26 – 49 North Resources Inc. said it received approval at a meeting on Tuesday to exchange the principal amount of its 9% convertible subordinated debentures due June 29, 2017 for a combination of common shares, first preferred series 1 shares and a new 2.5% senior secured convertible debenture.

At the meeting, 42.04% of the total outstanding debentures were voted, and 95.97% of the votes were in favor of the exchange.

As a result, holders will receive, per C$100 principal amount of debentures plus any accrued interest, 150 common shares, 25 preferred shares and C$25 principal amount of the new 2.5% convertibles.

The transaction, which is subject to final acceptance from the TSX Venture Exchange, is expected to close on June 1.

As previously reported, 49 North announced on May 13 that as of that date, 26.48% of noteholders had delivered proxies for the meeting, of which there was unanimous support for the restructuring. It also announced it had met quorum for the meeting.

The deadline for submitting proxies was 11 a.m. ET on May 22.

The company said on March 26 that the exchange would help secure the future of the company during the prolonged downturn for the junior resource capital market while offering the highest possible potential returns to both the debentureholders and shareholders.

In the most recent press release on Tuesday, 49 North said it is pleased with the results of the meeting, as it will allow the company to “once again focus its efforts on day-to-day operations and the continued repositioning of the company’s assets to take advantage of a recovery in the junior resource exploration industry.”

“This restructuring is a large step in ensuring the future viability of 49 North,” the release said.

The new non-voting preferreds will pay 2.5% cash dividends annually and will be issued at a price of C$1.00 per preferred. They are convertible into common shares at a conversion price of C$0.50 per share. They are also redeemable by the company at par after three years.

The new 2.5% debenture will have a principal amount of up to C$5 million and a term of five years. The outstanding principal amount of the new debenture will be convertible into common shares at C$0.50 per share. The repayment of outstanding principal and interest will be secured by all present and acquired personal property of the company.

49 North needed approval from the holders of 66 2/3% of the principal amount of the debentures voted at the meeting, either in person or in proxy.

The company is a Saskatoon, Sask.-based oil and gas exploration, development and production company with a resource investment portfolio and strategic operations in financial, managerial and geological advisory services and merchant banking.

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